Dublin, February 28: The Irish government attempted to secure a multi-billion euro bailout for the country’s struggling banks from Colonel Moamar Ghadafi’s international investment fund in December but failed because Libya dismissed it as a low-level investment.
National Treasury Management Agency representatives went to the North African state in a bid to get cash to prop up the Bank of Ireland, Allied Irish Banks or Anglo Irish Bank – the latter two of which were nationalized due to disastrous property loans – by selling an equity stake in one or more of them, according to British newspaper “The Sunday Times”.
Bank of Ireland is now seeking to tap investors for STG2 billion ($2.75 billion) to stave off full nationalisation.
But negotiations crumbled after the Libyan Investment Authority, which controls more than $64 billion of assets, said the banks were too small for it to consider.
The amount of money sought by the Irish delegation was unclear, though it was believed that some advisers – who feared public outrage would be triggered by financial links to a country accused of arming the Irish Republican Army during the 1970s and 1980s – thought that any amount would be too high.
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It was also understood that Libya declined to invest because of regulatory burdens that would have drawn unwanted attention to its financial activities.
Both Ghadafi and Ireland are in the process of political upheaval, though in very different forms.
Ghadafi, whose regime is being rocked by a popular revolt to the point that he is said to have lost control of several major cities in the country’s east, is maintaining his calls for a bloody crackdown that reportedly killed thousands so far.
High-profile politicians and diplomats have already jumped ship amid the violence, and international condemnation has been swift and harsh.
Ireland, on the other hand, opened polling booths Friday after Prime Minister Brian Cowen announced earlier in February that his position was no longer tenable and dissolved parliament so an early election could be called.
The leader until recently of Fianna Fail, the dominant force in Irish politics since the 1930s, became the first sitting Irish prime minister not to stand for re-election – but despite his replacement as party leader by Michael Martin, Cowen admitted that his party suffered a huge defeat as voters turned out to express their dissatisfaction with the country’s lingering economic malaise.
Ireland’s incoming government, on track to be a Fine Gael-led coalition, is widely expected to take a much stronger stance with the country’s financial institutions in an effort to jump-start the economy and restore stability, not least by trying to renegotiate an STG85 billion loan deal with the IMF and EU.
——–Agencies