Irish deficit balloons after new bank bail-out

The total amount has risen to 45bn euros (£39bn), or 32% of the country's gross domestic product (GDP).

The Bank said supporting Anglo Irish Bank alone would cost from 29.3bn euros to a "stress scenario" bail-out of up to 34bn euros (£29.2bn).

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

In comparison, the UK's deficit - including the cost of its bank support - is just over 10% of GDP for this year.

Last month, the cost of the bail-out of Anglo Irish was estimated at between 22-25bn euros.

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

On the markets, the key interest rate on Irish 10-year bonds fell to 6.55% from this week's all time high of 6.91%, an indication that investors' fears had abated slightly.

Huge risk

The BBC's business editor, Robert Peston, said the equivalent of about a third of the Irish economy had gone into supporting the banks:

"If you added together all the capital provided to Ireland's banks by various arms of the state, taxpayer support to those banks in the form of capital injections is around 30% of GDP."

He said that would compare with around 6% of GDP in the UK for the equity injected into Royal Bank of Scotland, Lloyds and Northern Rock.

In an interview with BBC Radio 4's Today programme, Mr Lenihan said the support was vital as Anglo Irish was too big to fail.

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“Start Quote

Ireland's roughly 2 million taxpayers are picking up the tab for tens of billions of misplaced private bets”

End Quote

Stephanie Flanders Economics editor, BBC News

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• Stephanomics: A problem shared

"The bank had grown to half the size of our annual national wealth, so clearly the failure of a bank on that scale would do huge damage to the local economy here in Ireland," he said.

The central bank also said it would also increase support to Allied Irish Bank, which would need 3bn euros before the end of the year.

A mass issue of new shares would take the government's stake to 90%.

Shares in the AIB have fallen 30% in response to the latest announcements.

Further help - of 2.7bn euros - would also be given to the Irish Nationwide Building Society.

The Bank of Ireland was not deemed to need any extra support.

Spending deficit

The Irish Republic is viewed as one of the weakest economies in the eurozone, despite it taking tough action to regain control of its economy.

The extra support for the banking system has led Mr Lenihan to say he will cut another 3bn euros from spending in the budget later this year, a move designed to help shrink the deficit to 3% of GDP by 2014 to keep within eurozone rules.

The latest news was welcomed by some market analysts.

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Finance Minister Brian Lenihan said Anglo-Irish was a 'systemic threat'

Padhraic Garvey, rate strategist at ING, said: "I think the market needs to know and here it is.

"It's a pretty astonishing deficit number. It's dominated of course by accounting practices because the Irish state is taking the pain upfront and funding it slowly over 10 years."

'Better health'

This week, mounting concern over the Irish economy sent its cost of borrowing on the open markets to a record level.

The latest GDP figures showed the Irish economy contracted by 1.2% for the second quarter. Greece's GDP dropped by 1.5% in the same period.

In an interview with the Financial Times, Mr Lenihan stressed that the country's financial health was better than other peripheral eurozone economies, saying it had borrowing already lined up to service debts and cover public services until the middle of 2011.

"We are not obliged to go to the markets. We are not under a clear and present constraint," he told the paper.

Mr Lenihan said the country would cancel its bond auctions in October and November and would not return to the bond markets until early in 2011.

The European Union's monetary commissioner, Olli Rehn, said he doubted that Ireland would need emergency aid from the fund established earlier this year by the EU and the International Monetary Fund to save Greece from bankruptcy.

There had been speculation that the Irish government would need such help - a suggestion rejected by the government.

Mark Saunders siege police 'feared suicide by cop'

One officer said colleagues considered whether Mr Saunders, 32, wanted to be killed during the armed siege at his Chelsea home in 2008.

Mr Saunders died after police bullets were fired at the end of a five-hour stand-off.

The inquest heard police marksmen were carrying more than 100 guns.

Firearms officers monitored his movements and their response on police radio channel 75 before the fatal shots at 2132 BST, the inquest heard.

In court, coroner Dr Paul Knapman, said: "There is a rather inelegant expression from America known as 'suicide by cop'."

Dr Knapman asked Insp Nicholas Bennett, of the Metropolitan Police's CO19 unit, if any of the firearms officers, monitoring on channel 75, had asked: "Hang on, is he asking to be shot?"

Dr Knapman also asked if any of the officers said: "Watch it, he might just be enticing us."

"Did that come over from any of the officers who were watching?," he added.

The inspector replied: "No sir, not specifically. But it was a constant theme throughout the evening which was apparent."

Dr Knapman said: "We have touched on that. But it was not specifically said at that time, in the minutes before?"

Mr Bennett replied: "No sir."

'High risk'

Earlier, the court heard how highly-trained officers were equipped with an arsenal including high velocity rifles, 9mm Glock self-loading pistols, MP5 carbines, Tasers and CS gas.

A total of 59 officers were posted around the man's home after he blasted a shotgun through his kitchen window.

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“Start Quote

I certainly would not have any more firearms officers there than I thought were necessary”

End Quote Inspector Nicholas Bennett Metropolitan Police

Westminster Coroner's Court heard that senior officers were keen the area should not be "bristling" with guns.

Nicholas Hilliard QC, for the coroner, asked: "If in this particular situation you can avoid the area bristling with firearms officers, is that something you try to do, if it can be done?"

Mr Bennett replied: "I certainly would not have any more firearms officers there than I thought were necessary."

Mr Bennett said Mr Saunders was "never less than high risk" and police were preparing for a long operation.

Asked if the large number of officers was a "surprise", Mr Bennett replied: "At that time we were planning for a protracted incident.

"Although it was apparent there were a great deal of firearms officers there, a great deal were not proactively employed in the operation, but are providing contingencies."

Mr Saunders, a successful family law specialist, died after police bullets were fired at the end of a five-hour stand-off.

Armed with two shotguns and a large amount of ammunition, he threatened to kill himself and fired several rounds as police told him to give himself up.

Mr Bennett, a firearms tactical advisor, said the chosen tactic of "contain and negotiate" was the least intrusive given the threat Mr Saunders posed.

Tasers could not be used because of their short range, some six metres, and shooting Mr Saunders with a plastic bullet from a baton gun was not appropriate, he added.

'Potential hostage'

He said such an "exceptionally high-risk strategy" could cause Mr Saunders to collapse out of sight, forcing police to enter the building and putting their lives in more danger.

Mark Saunders lowered his gun before he was shot, the inquest has heard

He said he spoke to Mr Saunders' widow, Elizabeth, in the street but did not consider it was his responsibility to decide if she could be used to negotiate.

"We may have been delivering a potential hostage into a situation where we did not have a hostage," he said.

The officer rejected claims there was a "degree of confusion" over who was responsible for the firearms teams or that the "strange" command structure put unnecessary pressure on a colleague.

The officers maintain they were firing in self-defence, or to protect others. Mr Saunders' family say he presented no risk to the public.

The inquest continues.

Obama, facing tough hard questions, says times still hard fot america

Obama still face more objections to the decisions in the recent period
For most people, stepping down from the presidency is the best solution for america
President Barack Obama on Monday said times were still tough for many Americans, as he defended his policies during aggressive questioning after the worst U.S. recession since the 1930s was declared over.

As audience members at a townhall-style meeting voiced exasperation and disappointment at his administration, and one woman said she was "exhausted" from defending him, Obama stressed he understood that people were frustrated.

"Even though economists may say the recession officially ended last year, obviously for the millions of people who are still out of work ... it is still very real for them," Obama told the meeting, hosted by CNBC television.

Obama's Democrats risk punishment in November congressional elections from voters worried by U.S. unemployment, stuck near 10 percent, and by the still-fragile state of the economy.

His first questioner wasted no time in laying out her gripes with the Obama administration.

"I'm one of your middle class Americans. And quite frankly I'm exhausted. I'm exhausted of defending you, defending your administration, defending the mantle of change I voted for, and deeply disappointed with where we are right now," she said.

Obama stuck to his guns, arguing the measures he had undertaken since taking office in January 2009 were slowly pulling the country back to health.

"My goal here is not to try to convince you that everything's where it needs to be -- it's not. That's why I ran for president. But what I am saying is ... that we're moving in the right direction," he said.

The National Bureau of Economic Research, the official arbiter of the U.S. business cycle, said on Monday the longest downturn since the Great Depression ended in June 2009.

But the pace of recovery since then has remained largely below the level needed to quickly replace the millions of jobs lost in the recession, and recent economic indicators signal growth has softened again in the past couple of months.

DEEP HOLE

"Something that took 10 years to create is going to take a little more time to solve," Obama said.

Republicans are expected to profit from the uncertain economic outlook in the November 2 midterm election, with polls suggesting they may well capture the U.S. House of Representatives and have an outside shot at the Senate.

All 435 seats in the House and 37 of the 100 Senate seats will be contested.

With his poll numbers under pressure, Obama's supporters warned he was losing the communications battle with Republicans and urged him to fight back.

"I need you to help us understand how you can regain the political center, because you're losing the war of sound bites. You're losing the media cycles," said a small business owner from Pennsylvania.

Pollster Cliff Young of market research firm Ipsos said the president had an uphill battle in changing the narrative about the economy in time for the November election.

"It doesn't matter what he says right now. People have tuned out in some ways because they are not feeling the positive impact in daily life," he told the Reuters Washington Summit.

Obama has sought to boost growth through an $814 billion emergency spending bill in February 2009. But additional steps to use fiscal policy to lift hiring have been blocked by Republican lawmakers worried about the record U.S. budget deficit, predicted to hit $1.47 trillion this year.

The White House proposes spending a further $180 billion over the next 10 years to renew U.S. infrastructure, boost research and encourage corporate investment.

Obama also wants to help consumer spending by making Bush-era tax cuts for families making less than $250,000 a year permanent, while allowing them to rise on richer Americans. Republicans want the tax cuts extended for everyone.

Some parts of the business community complain Obama is vilifying them and this sense of outrage is shared on Wall Street, which fiercely opposed his shake-up of financial regulations that became law earlier this year.

"I represent the Wall Street community," said one man who runs a hedge fund. "We have felt like a pinata. Maybe you don't feel like you're whacking us with a stick, but we certainly feel like we've been whacked with a stick."

If you will remain on the throne of Obama presidency?
Or leave the presidency to anyone who is better than him