Dan White: The banks are back for more money and we can't afford it. Hate to say it, but I told you so
Anglo chairman and former Finance Minister Alan Dukes let the cat out of the bag when he told his shocked audience at a business conference in Cork that at least €15bn more would be needed to fix the banks.
While his claims sparked furious denials from the Department of Finance, given their previous record on this matter, my money is on the tall fellow rather than the mandarins.
If Dukes is right, and I suspect that he probably is, then it makes a nonsense of the sums on which last November's EU/IMF "bailout" was based.
Last November it was envisaged that the Government would have to inject another €35bn into the bankrupt Irish banks.
Coming on top of the taxpayers' money that has already been poured down this particular drain this would have brought the total to at least €50bn.
Dukes's claims yesterday would push up the total cost of the Irish bank bailout to €65bn. And that's almost certainly not the end of the affair. Last autumn, ratings agency Standard & Poor's forecast that the total cost of the Irish bank bailout would eventually rise to €90bn.
€65bn, €90bn, who cares? If anyone imagines that the Irish taxpayer can shoulder this entire burden then I can only conclude that they are devotees of the Looney Tunes school of economics.
What is certain is that those of us who warned at the time that the bailout, by piling an insupportable burden of debt on the Irish taxpayer, couldn't work have been proved right sooner than we had expected.
As if on cue, not one but two stockbroking firms issued forecasts this week warning that the new Government would have to change its current policies with Goodbody Stockbrokers arguing that we should force the remaining bank bondholders to accept a 50pc "haircut" while NCB Stockbrokers predicted that a restructuring of the national debt would be necessary if economic growth remained lower than forecast in last November's Four Year Plan.
Where were we when we needed ye, lads!
While "burning" the bondholders, a policy with which I agree, should form a part of any resolution of the Irish banking crisis, the problem is that, on its own it would be a case of too little, too late with "only" €20bn worth remaining to be repaid. Most of the senior bondholders, about €70bn worth, have already been repaid in full courtesy of the ECB, which has now pulled down the shutters on the Irish banks.
What this means is that we must now also "burn" those who facilitated the full repayment of the former senior bondholders of the Irish banks. As anyone who reads financial author Michael Lewis's excellent article on Ireland in Vanity Fair will quickly learn, the senior bondholders of the Irish banks were amazed and astounded when they were repaid in full.
That, unfortunately, is water under the bridge.
While the senior bondholders have ridden off into the sunset after having been fully repaid, the bank losses remain with the Irish taxpayer.
Meanwhile the Irish banking system continues to unravel with the January banking statistics, which are due to be published at the end of the month, expected to show a further flight of deposits from the Irish-owned banks.
Things cannot continue as they have done since September 2008. Endless delay and prevarication is no longer an option. Time is now desperately short. The new Taoiseach and Finance Minister are going to have to stand up to the EU and the ECB -- the IMF has discreetly let it be known that it favours a "haircut" for Irish bank bondholders -- and make it clear that Europe will have to bear some of the cost of the Irish banking debacle.
If Europe refuses to accept that it is at least partially responsible for the mess then the new Government should be prepared to act unilaterally. Can't pay, won't pay.