Thursday, November 18, 2010

Ireland Bailout Around the Corner

Ireland’s central bank governor on Thursday said Dublin was “definitely likely” to ask for a loan “of tens of billions” of euros from the European Union and the International Monetary Fund to “show that Ireland has sufficient firepower to deal with any” market concerns.

Patrick Honohan, the governor, told Irish radio the money would be “shown but not used”.

EU and IMF technicians are on the ground in Ireland , no doubt they are trying to figure out a way to squeeze every euro they can out of Irish citizens in an effort to keep the big banks protected.

Not only do the Irish banks own Irish government debt, but there has been a medium grade run  on Irish banks. Honohan put it this way, there has been “steady drain of deposits”..."This is something for which the banks have facilities, and I – from the Irish central bank – I’m in a position to provide exceptional funding to any bank if needed. Of course I would have to make sure the other members of the ECB don’t object.”

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