Will the Irish banks require billions more?

NAMA Wine Lake

So far Ireland has spent €67.8bn bailing out the banks, comprising €62.8bn in cash and promissory notes directly injected into the banks, and a further €5bn gifted to the banks by NAMA in state-aid and for which we are now on the hook if property prices don’t recover. In a country whose GDP was €156bn in 2011, this represents 43% of GDP. I wonder how the Spanish would feel if they were told now that this was the type of debt they will need shoulder to rescue their banks, rather than the tiddly 10% of GDP implied by the €100bn bailout announced over the weekend? But as bad as Ireland’s bailout costs are so far, they could be set to grow even more. We know about the extra €4bn which the deputy governor the Central Bank of Ireland announced a fortnight ago, which will be required in a couple…

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