DUBLIN (Reuters) – Ireland revealed it faces a bill of up to 50 billion euros ($68 billion) to clean up its banks, equating to over 11,000 euros per head of a recession-weary population already reeling from savage government cutbacks.

Unveiling the latest in a string of bank bailouts, Finance Minister Brian Lenihan promised on Thursday that Ireland had arrived at the endgame for dealing with massive property losses but warned years of pain lay ahead for taxpayers.

“We have to bring closure to this matter and that is what we have done today,” Lenihan, charged with picking up the pieces of Ireland’s property-fueled “Celtic Tiger” economic boom, said.

“Of course these figures are horrendous but they can be managed over a 10 year period.”

Fears Ireland will follow Greece by turning to its European Union partners and the IMF for help abated, however, after Lenihan canceled all bond auctions for the rest of the year, highlighting the fact that a growing but well-structured debt portfolio means there is no impending liquidity crisis.

The premium investors demand to hold Irish 10-year debt over benchmark German bunds narrowed to 457 bps, after hitting a euro lifetime high of 475 bps earlier this week. The cost of insuring Irish debt against default also fell.

Ireland still has to pay almost three times as much interest on new borrowings as Germany, however, reflecting the fact that the government’s budget deficit will blow out to 32 percent of Ireland’s economic output this year, more than 10 times EU’s 3 percent cap and by far the worst in the union.

DUBLIN (Reuters) – Ireland, warning its recession-weary people to prepare for more austerity, revealed on Thursday a mammoth worst-case price tag of over 50 billion euros (43 billion pounds) to clean up its banks.

Finance Minister Brian Lenihan, estimating it could cost the state up to 34 billion euros just to wind down stricken Anglo Irish Bank, insisted loss projections would not rise further and that the government had entered the final phase of working out a plan to deal with banks’ bad property loans.

“We have to bring closure to this estimate matter and that is what we have done today,” Lenihan said. “Of course these figures are horrendous but they can be managed over a 10-year period.”

The reaction in financial markets, which had been prepared for the huge cost estimate, was modestly positive. The premium which investors demand to hold Irish 10-year debt over benchmark German bunds narrowed 9 basis points to 457 bps, after hitting a euro lifetime high of 475 bps earlier this week. The cost of insuring Irish debt against default also fell.

“What they are doing is really giving us the bad news upfront. I think the market needs to know, and here it is,” said Padhraic Garvey, interest rate strategist at ING. “It certainly gives them breathing space.

“It’s a pretty astonishing deficit number, it’s higher than the national debt a few years ago which is an incredible situation to be in.”

Lenihan said Ireland was cancelling its bond auctions for the rest of this year, a decision which helped to reassure the markets by suggesting the country still had ample cash reserves, and was therefore not close to seeking an international bailout.

DUBLIN (Reuters) – Ireland put a 34 billion euros ($46 billion) price on bailing out stricken Anglo Irish Bank ANGIB.UL under a worst case scenario, prompting the government to promise on Thursday a new four-year budget plan in November.

Finance Minister Brian Lenihan said additional efforts were required to get the deficit below 3 percent of GDP by 2014 after Ireland’s regulator said nationalized Anglo Irish Bank ANGIB.UL, Allied Irish Banks (ALBK.I: Quote, Profile, Research, Stock Buzz) and building society Irish Nationwide all needed additional capital.

Under its base case scenario, the central bank said the Anglo Irish bill was expected to be 29.3 billion euros while Allied Irish Banks (ALBK.I: Quote, Profile, Research, Stock Buzz) needed to raise an additional 3 billion euros by the end of the year.

The government may take a majority stake in Allied Irish.

“Today’s announcements take the Irish banking system closer to a final resolution of its restructuring, which is a prerequisite for sustained economic recovery,” Central Bank Governor Patrick Honohan said in statement.

“The additional budgetary costs — and in particular the higher debt-to-GDP ratio that is implied — confirm the need for a reprogramming of the budgetary profile,” Honohan said.

The euro slipped in the wake of the announcement about the nationalized lender.

DUBLIN (Reuters) – Ireland’s central bank has put a 34 billion euro (29 billion pound) price on bailing out stricken Anglo Irish Bank under a worst case scenario and said Allied Irish Banks needs to raise an additional 3 billion euros by the end of the year.

The government will announce later on Thursday plans to recapitalise Allied Irish Banks, the central bank said. Dublin already has a near 19 percent stake in the lender.

“Today’s announcements take the Irish banking system closer to a final resolution of its restructuring, which is a prerequisite for sustained economic recovery,” Central Bank Governor Patrick Honohan said in statement.

Under its base case scenario, the central bank said the Anglo Irish bill was expected to be 29.3 billion euros.

The euro slipped in the wake of the announcement about the nationalised lender.

The central bank said the additional cost of recapitalising Anglo Irish Bank and Allied Irish Banks confirmed the need for a reprogramming of the government’s budget plans.

“The additional budgetary costs — and in particular the higher debt-to-GDP ratio that is implied — confirm the need for a reprogramming of the budgetary profile, though it is important to recognise that the bulk of this reprogramming need arises from other sources,” Honohan said.

DUBLIN, Sept 30 (Reuters) – Ireland’s central bank has put a 34 billion euro price on bailing out stricken Anglo Irish Bank [ANGIB.UL] under a worst case scenario and said Allied Irish Banks (ALBK.I: Quote, Profile, Research, Stock Buzz) needs to raise an additional 3 billion euros by the end of the year.

The government will announce later on Thursday plans to recapitalise Allied Irish Banks, the central bank said. Dublin already has a near 19 percent stake in the lender.

“Today’s announcements take the Irish banking system closer to a final resolution of its restructuring, which is a prerequisite for sustained economic recovery,” Central Bank Governor Patrick Honohan said in statement.

Under its base case scenario, the central bank said the Anglo Irish bill was expected to be 29.3 billion euros.

The euro slipped in the wake of the announcement about the nationalised lender.

The central bank said the additional cost of recapitalising Anglo Irish Bank and Allied Irish Banks confirmed the need for a reprogramming of the government’s budget plans.

“The additional budgetary costs — and in particular the higher debt-to-GDP ratio that is implied — confirm the need for a reprogramming of the budgetary profile, though it is important to recognise that the bulk of this reprogramming need arises from other sources,” Honohan said.

DUBLIN (Reuters) – Ireland’s borrowing costs hit a record high Tuesday after two credit rating agencies warned its debt is at risk of further downgrades, compounding political jitters over a budget that could break a shaky government.

Ireland is battling to convince investors it can afford to rescue its stricken banking sector and cut the biggest budget deficit in the European Union, given a weak economy and growing risks of a political crisis.

“I cannot pretend that the current rating is totally secure,” Chris Pryce, a senior analyst with Fitch, which has Ireland at AA- with a stable outlook, told Reuters.

Dublin is hoping a final bill for dealing with nationalized lender Anglo Irish Bank, expected later this week, will clear up fears that the cost will vastly exceed a current estimate of 25 billion euros ($34 billion).

“We will be … providing a manageable way forward on how that will be dealt with over the longer term,” Prime Minister Brian Cowen told reporters.

His coalition’s parliamentary majority may have shrunk to two seats after defections, the opposition is upping pressure for an early election, and his Green partners look increasingly uncomfortable in government as harsher austerity measures loom.

“We are determined to do what’s necessary to achieve international confidence and build domestic confidence,” Cowen said.

DUBLIN, Sept 28 (Reuters) – Two more credit rating agencies warned Ireland on Tuesday that its debt is at risk of further downgrades, triggering another leap in borrowing costs and heaping pressure on the government to bring forward its budget.

Ireland is battling to convince investors it can afford to shore up its banking sector and cut the biggest budget deficit in the European Union, given its weak economy and growing risks of a political crisis.

“I cannot pretend that the current rating is totally secure,” Chris Pryce, a senior analyst with Fitch, which currently has Ireland at AA- with a stable outlook, told Reuters in an interview. [ID:nWLA3990]

The government is hoping a final bill for dealing with nationalised lender Anglo Irish Bank [ANGIB.UL], expected later this week, will clear up fears that the cost will vastly exceed a current estimate of 25 billion euros ($34 billion).

But Standard & Poor’s said on Tuesday its estimate Ireland would have to pour 35 billion euros into Anglo Irish, a figure heavily criticised by local policymakers, looked increasingly realistic and any amount beyond that could trigger rating downgrades.

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For graphic on Europe’s struggle with debt:

DUBLIN (Reuters) – Standard & Poor’s warned on Tuesday it may cut Ireland’s credit rating again due to the rising cost of recapitalising nationalised Anglo Irish Bank, pushing Dublin’s borrowing costs to fresh peaks.

Ireland is battling to convince investors it can afford to prop up its ailing banking sector and cut the biggest budget deficit in the European Union in the face of a faltering economy and growing risks of a political crisis.

So far it appears to be losing the argument.

Coming a day after credit agency peer Moody’s slashed its ratings on Anglo Irish’s lower-grade debt, S&P’s fresh warning sent Irish credit spreads to new highs and the cost of insuring Irish debt from default hit a new peak.

The news also drove other euro zone peripheral spreads higher.

Ireland’s rising borrowing costs are unsustainable over the medium term and are putting mounting pressure on Prime Minister Brian Cowen as he heads into a new parliamentary term on Wednesday, with his coalition and deficit-cutting mandate looking shaky.

The 25 billion euros of aid so far earmarked for Anglo Irish would already push Ireland’s 2010 budget deficit to around 25 percent of gross domestic product, compared with an EU limit of 3 percent that Dublin aims to reach by 2014.

DUBLIN, Sept 28 (Reuters) – Standard & Poor’s warned on Tuesday it may cut Ireland’s credit rating again due to the rising cost of recapitalising nationalised Anglo Irish Bank [ANGIB.UL], pushing Dublin’s borrowing costs to fresh peaks.

Ireland is battling to convince investors it can afford to prop up its ailing banking sector and cut the biggest budget deficit in the European Union in the face of a faltering economy and growing risks of a political crisis.

So far it appears to be losing the argument.

Coming a day after credit agency peer Moody’s slashed its ratings on Anglo Irish’s lower-grade debt, S&P’s fresh warning sent Irish credit spreads to new highs and the cost of insuring Irish debt from default hit a new peak. [ID:LDE68R0C8] [ID:nLDE68R0GY]

The news also drove other euro zone peripheral spreads higher.

Ireland’s rising borrowing costs are unsustainable over the medium term and are putting mounting pressure on Prime Minister Brian Cowen as he heads into a new parliamentary term on Wednesday, with his coalition and deficit-cutting mandate looking shaky.

The 25 billion euros of aid so far earmarked for Anglo Irish would already push Ireland’s 2010 budget deficit to around 25 percent of gross domestic product, compared with an EU limit of 3 percent that Dublin aims to reach by 2014.

DUBLIN, Sept 27 (Reuters) – Credit agency Moody’s slashed some debt ratings on Anglo Irish Bank [ANGIB.UL] on Monday, saying there was a risk Dublin might default on lower-grade loans issued by the nationalised lender.

As the government prepared to reveal the final cost of rescuing a bank whose soured property deals have crippled the economy, Finance Minister Brian Lenihan reiterated both the country and its financial institutions would “honour their obligations”.

But in comments that sent the euro to an intraday low against the dollar, the rating agency said it was cutting Anglo Irish’s senior unsecured debt by three notches to Baa3 — just one notch above junk status — due to a small risk the government would not continue to support that class of loan.

It also chopped Anglo Irish’s subordinated debt, by six notches to Caa1.

The steadily mounting scale of the bank’s rescue has heaped further pressure on already strained public finances, propelling the former ‘Celtic Tiger’ economy to the forefront of investor concerns about the sustainability of sovereign debt in the euro zone.

According to unnamed government sources cited by German business daily Handelsblatt on Monday, the European Central Bank gave serious consideration to activating the euro zone’s bailout fund for Ireland but in the end decided not to. [ID:nLDE68Q0W5]

Lenihan had previously said it was unthinkable that Ireland would default on senior debt but, in the absence of such assurances given on subordinated paper, analysts say such debt might face a buyback at well below par.