Honohan says Anglo bailout is manageable

Monday 16 August 2010 20.46
Patrick Honohan - Plans are 'well on track'
Patrick Honohan - Plans are 'well on track'

Central Bank Governor Patrick Honohan has repeated that he believes the bailout of Anglo Irish Bank is 'costly but manageable'.

The inclusion of the costs of the Anglo rescue in the State's accounts could push Ireland's budget deficit close to 20% this year.

Speaking in Hong Kong, Professor Honohan reiterated that Ireland's budget deficit this year would be around 20% of its annual Gross Domestic Product.

The European Union last week approved plans for up to another €10bn of funding for Anglo Irish Bank.

Professor Honohan said yesterday that plans to recapitalise the bank were well on track and had little impact on the Government's overall deficit plans.

He said Ireland remained committed to its target of reducing its budget deficit to 3% of gross domestic product by 2014.

'It's a very high deficit measured this year because we're taking the hit, we're acknowledging the losses in the banking system and those losses which are being paid for by the Government have to be included in the deficit,' he said.