26/12 The Front Pages

Brian Lenihan's cancer has 'stabilised' and the ECB warns that the passing of a law could make lending more expensive.

In an interview with the Sunday Independent's editor Aengus Fanning which appears in this week's paper Finance Minister Brian Lenihan has spoken of his battle with pancreatic cancer.

"The condition has stabilised," he says. "I'm really grateful for the good wishes I have received from all over Ireland, and the excellent help, obviously, at the Mater Hospital. Everyone has been so kind and good to me.

When asked about the forthcoming election he says: "I intend to contest the next General Election. My name is being put forward for a convention, which will take place in January, in my own constituency of Dublin West.

"I certainly intend to put my name before the people. After that, of course, they will have to decide.

"It will be a very difficult election for the Fianna Fáil party. I know that the thousands of members that we have all over Ireland are very concerned at the circumstances that the party finds itself in."

Meanwhile, The Sunday Times reports that the European Central Bank (ECB) has warned that the Credit Institutions (Stabilisation) Act, signed into law by President McAleese last week, will make it more difficult and expensive for Irish banks to access funds.

The law was used for the first time on Thursday in order to effectively nationalise AIB. It allows the Finance Minister total freedom to switch assets from one bank to another.

The ECB's view is that he failed to protect its interests adequately when framing the new law.

"The security of our money, which is public money, is of utmost importance to us," an ECB source told the Sunday Times. "While of course we want to help the Irish banking sector survive, we won't do that at any price."

The ESB were sent a first draft of the bill that became the new law in early December, but their recommendations weren't implemented.

"If our recommendations had been implemented, the probability of the Irish banking system going back to a normal state quickly would have been much higher than it is now," the source said. "But what is crucial is that the Irish government ignored the recommendations."

Blimey, that doesn't sound good. Still, we've always got that giant warchest of surplus money to call upon if the borrowing of billions of Euro from the ESB gets too expensive (only, of course, we haven't).