1 Oct 2010

Bank bail-out tips Irish Republic into deeper deficit

8:37 am on 1 October 2010

The cost of bailing out stricken banks in the Irish Republic has risen to 45 billion euros - 32% of the country's gross domestic product. The country now faces a huge budget deficit.

The Irish Central Bank said supporting Anglo Irish Bank alone would cost between 29.3 - 34 billion euros.

Finance minister Brian Lenihan says it is "manageable". Without the bank support, the deficit would be 12%.

The BBC reports the cost of the bail-out of Anglo Irish was estimated at between 22 - 25 billion euros last month.

The Irish Republic says the latest announcement represents the final costs of repairing the country's banking system. It hopes this will reassure investors.

On the markets, the key interest rate on Irish 10-year bonds has fallen to 6.55% from an all time high of 6.91%.