Michael Noonan Rte Interview

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Station: RTE Radio One Programme: Morning Ireland Presenter: Aine Lawlor and Cathal Mac Coille Date: Friday 1st April 2011 Time: 08:15 Duration: 17:40 Cost of Rescuing Ireland's Banks' Now a Staggering €70 Billion / Interview Minister for Finance, Michael Noonan So now we know that the cost of rescuing the Banks' is a staggering €70 billion. The new Government intends putting in another €24 billion of the State's money and shrinking the Banks' from six to two. And Central Bank Governor, Patrick Honohan insisted yesterday, the savings Ireland could make by not repaying senior bank bond holders in full, that saving would not be worth the long term cost to us of default. Aine Lawlor discusses all the issues with the Minister for Finance, Michael Noonan. Aine Lawlor: So now we know that the cost of rescuing the Banks' is a staggering €70 billion. The new Government intends putting in another €24 billion of the State's money and shrinking the Banks' from six to two. And Central Bank Governor, Patrick Honohan insisted yesterday, the savings Ireland could make by not repaying senior bank bond holders in full, that saving would not be worth the long term cost to us of default. That's a question we'll be putting to Finance Minister, Michael Noonan who's with us in studio in a moment. The other big question is simply can Ireland afford this bank rescue? Many outside commentators think now. Here's what Mohamed El-Erian, Chief Executive of Pimco had to say on Bloomberg Television yesterday. Now Pimco is the world's biggest bond fund. It manages investments worth $1.2 trillion. And Mr El-Erian says the strategy of paying back all your creditors in a debt crisis, he says that hasn't worked down through history, and it won't work this time. Mohamed El-Erian (Chief Executive, Pimco): The only people doing their fair share right now, in fact I would say they're doing more than their fair share, are the Taxpayers of Ireland, who are having to go through tremendous austerity, and the IMF and the EU that are putting in money. The creditors' most of the creditors' so far, have not gone through any burden sharing. Interviewer: Why? Mohamed El-Erian (Chief Executive, Pimco): And it's absolutely remarkable, it is remarkable, is it is inadvisable, but it is a political decision that has been taken. It surprises me. I don't think you can sustain that political decision. Interviewer: But you know all these guys. You're jetting around the world. You're going around the world. You're talking to these elites, what are they hoping for? Mohamed El-Erian (Chief Executive, Pimco): What they're hoping for, is by maintaining the creditors' intact, that the creditors' are going to rush back in with new money. What they haven't read is the


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