Easing in Ireland's debt crisis
By Carlo Piovano |
November 13, 2010, Saturday
|
Print Edition
Print Edition
IRELAND'S debt crisis eased a notch yesterday after European governments reassured investors that new, tougher terms for bailouts will not expose them to higher costs on their current holdings.
Traders have been dumping Ireland's sovereign bonds on fears the government will be unable to manage its outsized banking crisis and that new European Union rules being discussed will force investors to take on heavier losses in case of a bailout.
Ireland's borrowing cost hit a new euro-era high on Thursday, prompting the finance ministers of several fellow eurozone countries to gather for impromptu talks on the sidelines of the Group of 20 summit in Seoul, South Korea.
The EU's proposed new bailout mechanism "does not apply to any outstanding debt," the finance ministers of Germany, France, Italy, Spain and Britain stressed in a joint statement yesterday.
"Any new mechanism would only come into effect after mid-2013 with no impact whatsoever on the current arrangements," they said.
Ireland's 10-year bond yield fell to 8.25 percent in Dublin yesterday from 8.87 percent on the open and Thursday's record high of 8.95 percent. Bond yields and prices move in opposite directions.
After saving Greece from bankruptcy in May, the EU set up the European Financial Stability Facility, a 750-billion-euro (US$1.03 trillion) backstop for any other countries that might need support.
Since then, Germany has been pushing to modify rules about who bears the cost of the bailouts in an effort to protect taxpayers in less profligate countries.
Fears over those new rules and confusion about when they might come into force have pushed investors in recent weeks to sell off government bonds in heavily indebted countries - Ireland, Portugal and Spain.
Analysts at Glas Securities in Dublin say that lack of full understanding of the bailout mechanism "has in itself added considerably to the 'fear of the unknown' and consequent rise in Irish yields."
Traders have been dumping Ireland's sovereign bonds on fears the government will be unable to manage its outsized banking crisis and that new European Union rules being discussed will force investors to take on heavier losses in case of a bailout.
Ireland's borrowing cost hit a new euro-era high on Thursday, prompting the finance ministers of several fellow eurozone countries to gather for impromptu talks on the sidelines of the Group of 20 summit in Seoul, South Korea.
The EU's proposed new bailout mechanism "does not apply to any outstanding debt," the finance ministers of Germany, France, Italy, Spain and Britain stressed in a joint statement yesterday.
"Any new mechanism would only come into effect after mid-2013 with no impact whatsoever on the current arrangements," they said.
Ireland's 10-year bond yield fell to 8.25 percent in Dublin yesterday from 8.87 percent on the open and Thursday's record high of 8.95 percent. Bond yields and prices move in opposite directions.
After saving Greece from bankruptcy in May, the EU set up the European Financial Stability Facility, a 750-billion-euro (US$1.03 trillion) backstop for any other countries that might need support.
Since then, Germany has been pushing to modify rules about who bears the cost of the bailouts in an effort to protect taxpayers in less profligate countries.
Fears over those new rules and confusion about when they might come into force have pushed investors in recent weeks to sell off government bonds in heavily indebted countries - Ireland, Portugal and Spain.
Analysts at Glas Securities in Dublin say that lack of full understanding of the bailout mechanism "has in itself added considerably to the 'fear of the unknown' and consequent rise in Irish yields."
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
