Recapitalising the banks. We can see the effect of the recent State recapitalisation of the covered banks in the Money, Credit and Banking Statistics. Here are Irish resident deposits in the covered banks. Our focus here is on government deposits. After being below €3 billion for several years, government deposits in the covered banks jumped to €21 billion in April. This was the money liquidated from the NPRF and borrowed from the EU/IMF that would be used to recapitalise the banks. Government deposits stayed above €21 billion until June and in July dropped to €2 billion.
The fall in deposits from government is offset by the rise in capital in the bank. There has been some suggestions that the banks have been using this money to buy Irish government bonds. Some caution is required, for a few reasons. The data do not really support this thesis (yet). Holding of bonds issued by the government increased from €9.4 billion to €9.6 billion in July. Pourquoi l’Irlande n’a pas déclenché une nouvelle crise de la zone euro.
Dublin, pour sauver son secteur bancaire, a annoncé, le 30 septembre, que son déficit public atteindra 32 % du PIB fin 2010, soit trois fois plus que celui qui était espéré ! Le même jour, l’Espagne a perdu son « triple A » et donné un nouveau de vis budgétaire pour réduire son déficit public (9,1 % en 2010), à l’image de son voisin portugais (dont le déficit est « seulement » de 7,3 % en 2010). Quelques jours plus tard, Fitch Ratings et Moody’s ont dégradé une nouvelle fois la note irlandaise… Une avalanche de mauvaises nouvelles qui, pourtant, n’a pas déclenché une nouvelle crise de la dette souveraine équivalente à celle qu’a traversée la zone euro au premier semestre : l’Irlande et la péninsule ibérique continuent à avoir accès aux marchés pour se financer, même si c’est à un coût élevé, et l’euro a poursuivi sa marche triomphale pour retrouver ses cours du début de l’année (autour de 1,40 dollar…).
La zone euro ne fait manifestement plus peur aux investisseurs. La face cachée du « sauvetage » de l’Irlande. L’attention des médias sur la situation de l’Irlande s’est beaucoup portée sur le « plan de sauvetage » de 67,5 milliards d’euros conclu en novembre 2010, et remis sur le devant de la scène lors du sommet de l’eurozone le 11 mars dernier.
Pourtant, ce plan de sauvetage n’est que la partie émergée d’un iceberg bien plus vaste et indécent : le renflouement du secteur bancaire. Le plan de sauvetage européen Revenons tout d’abord sur le plan de sauvetage octroyé dans la nuit du 28 novembre 2010. Ce plan de sauvetage de 67,5 milliards d’euros est financé par le Fonds Monétaire International (FMI), le Fonds Européen pour la Stabilité Financière (FESF), le Mécanisme Européen de Stabilité Financière (EFSM), ainsi que des prêts bilatéraux avec le Royaume-Uni, la Suède, et le Danemark (qui ne sont pas dans l’euro, et ne participent donc pas au FESF). Par ailleurs, fait assez méconnu, l’État irlandais s’est également engagé à débourser 17,5 milliards d’euro pour son propre secours.
Très juste ! Protests against irish bailout. More than 100,000 Irish citizens took to the streets of Dublin today to protest against the international bailout and four years of austerity. Despite overnight snow storms and freezing temperatures, huge crowds have gathered in O'Connell Street to demonstrate against the cuts aimed at driving down Ireland's colossal national debt. So far the march has passed off peacefully although there is a huge Garda presence with up to 700 officers on duty working alongside 250 security guards for the Irish Congress of Trade Unions.
Among the marchers there is deep anger that most of the more than €80bn (£67bn) from the EU and the International Monetary Fund will be given to shore up Ireland's ailing banks. Marching in the rally was Irish builder Mick Wallace who has had to lay off 100 workers due to the crash in the construction industry. Wallace said it was time the Irish became more militant.
"We should be more like the French and get onto the streets more often. It's an €85bn deal -- now it's up to us - National News, Frontpage. THE EU last night finally signed off on our €85bn bailout -- with a clear warning that we have to turn our economy around in four years. The massive cash injection -- which Taoiseach Brian Cowen said would cost an average of 5.8pc in interest -- is designed to underpin our public finances and restructure the banks. It comes with a number of strict economic guidelines and the Government will face a grilling on these targets every three months. Key areas under scrutiny include: Meeting €15bn in Budget spending cuts and tax increases. Massive restructuring of the main banks -- and a shrinking of the banking system. Banks must draw up a list of potential assets to dispose of. A clampdown on public-sector pay. An extra year, until 2015, to bring our deficit to within the EU limit of 3pc of GDP The loans will take 10 years to repay and will mean the Government may not have to go to the international markets to borrow money for the next three years. - Maeve Dineen, Fionnan Sheahan and Fiach Kelly.
IMF chief predicts 'rapid recovery' from our crisis - Irish, Business. Emmet Oliver, Laura Noonan and Charlie Weston – Updated 02 December 2012 09:42 PM IMF managing director Dominique Strauss-Kahn said the €85bn package agreed for Ireland would fix the banks and ultimately the economy. "I think the decision that has been made will fix the problems in the banking sector, and the Irish economy will come back on track rather rapidly," he said. Speaking in India, Mr Strauss-Kahn said the crisis in Ireland was mostly coming from the banking sector. The organisation also revealed yesterday during a press briefing in Washington that the IMF's €22.5bn loan to Ireland would have to be paid off ahead of all other loans, if Ireland ever got into difficulty.
The IMF loan would be ranked ahead of the EU, British, Swedish and Danish loans if a problem of repaying the loans ever arose, a spokeswoman confirmed. The IMF has "preferred creditor'' status, meaning its loan legally comes ahead of the other loans. Bullied Irish Independent Read More. Comment fonctionnera le plan de sauvetage irlandais. Dublin a sollicité dimanche un plan international d'aide financière pour restaurer l'état de son secteur bancaire et réduire son déficit budgétaire. Comment fonctionnera cette aide, sous quelles conditions, et quel en sera le coût pour l'Irlande ?
Quelles aides sont disponibles pour l'Irlande ? Le filet de sécurité européen est composé du Mécanisme européen de stabilité financière (MESF), qui peut prêter jusqu'à 60 milliards d'euros, et du Fonds européen de stabilité financière (FESF), doté de l'équivalent de 440 milliards d'euros en garanties des différents Etats européens. Le MESF est disponible pour l'ensemble des 27 pays de l'Union européenne, mais le FESF est réservé aux 16 membres de la zone euro. Dans le cas irlandais, les ministres des Finances de l'UE ont indiqué que les deux sources seraient utilisées. Les fonds provenant du FESM seront versés en premier, puis ceux du FESF et du FMI. Quel serait le processus ? C'est la première fois que le mécanisme est utilisé. 1. 2. 3. 4. 5. 6.
Ireland funding. The end of February exchequer statement, released by the Department of Finance, shows how much money Ireland has drawn from the EU/IMF ‘bailout’. Note 7 shows: Euro Financial Stabilisation IMF Extended Fund Facility Euro Fin. Total It is probably worth having a look at the total €85bn package for Ireland, to see who has promised to lend the money, and – more importantly – when they are getting it. €bn NTMA and NPRF Sweden Denmark Probably easiest if we go through the sources in order. (i) The EFSF is only available to eurozone members, and only backed by eurozone members. (ii) The EFSF needs an AAA rating to raise money as cheaply as possible. (iii) This doesn’t mean that the EFSF has €366bn to lend though. The EFSF issued its first bond on January 25th. Last on the list for the €85bn are the UK, Denmark and Sweden.
So, that is where Ireland’s funding is coming from, and how much it is costing. Ireland must find €17.5bn from its pension fund and reserves for bailout | Business. EU ministers tonight spelt out the terms of Ireland's €85bn international financial rescue package, and revealed the Dublin government will have to raid its national pension fund and other cash reserves for €17.5bn as a condition of the deal to bail out its banks and debt-laden economy. The unexpected contribution from Ireland was demanded at a hastily arranged meeting of the eurozone's finance ministers, who were desperate to secure a deal before the markets open tomorrow.
The package from the EU and International Monetary Fund includes €67.5bn of external loans. €10bn will go straight to the crippled banks, and €25bn is earmarked for bank support in the future. The remaining €50bn will be used to shore up the public finances and allow the government to keep making welfare payments and cover other expenses such as health and education. Osborne said: "There is a loan going from Britain to Ireland of just over £3bn. . • Of the €67.5bn, the IMF is putting up €22.5bn. Loans to Ireland Act 2010. Ireland's debt crisis - live coverage | Business. 11.16pm: More from Henry McDonald, on reports tonight from Brussels that the UK will play some role in a de facto bail out rescue plan for the Irish Repubilc would be of some supreme historic irony. If, as reported on Newsnight, the British will play a part in a plan to rescue ailing Irish banks also involving the European Central Bank and the International Monetary Fund.
Officials from the ECB and the IMF are expected in Dublin over the next few days to meet with their Irish counterparts even while Dublin ministers insist they are not seeking a bail out. For almost two decades the Irish have trumpeted their economic independence from the UK and its replacement of one union (i.e. with Britain) with a union alongside other Europeans. That's all for tonight. Thanks for reading and for all the comments. 10.37pm: Henry McDonald, the Guardian's man in Ireland, writes: 9.47pm: Juncker was keen to stress it is up to the Irish government to ask for support, Elena says. 9.07pm: You can watch here. Ireland bailout fails to calm nervy markets | Business. Irish prime minister Brian Cowen speaking to the media in Dublin yesterday after the EU approved the €85bn bailout.
Photograph: Peter Muhly/AFP/Getty Images Stocks fell on both sides of the Atlantic, the euro tumbled, and the cost of borrowing for Ireland, Spain and Portugal jumped today, as details of the republic's €85bn (£72bn) bailout failed to quell anxiety that the crisis in the eurozone was deepening. Amid speculation that the European authorities may be left with little option but to embark on large-scale quantitative easing to try to bolster sentiment, Ireland's borrowing costs shot as high as 9.6% as the terms of its bailout by the International Monetary Fund and European Union were digested by investors. "The bottom line is that the financial markets are unimpressed, and that's the most generous description," Neil MacKinnon, global macro strategist at VTB Capital told Associated Press. Un plan trop loin. Comme on pouvait le pressentir déjà vaguement ou moins depuis quelques jours, et notamment depuis que l’Irlande hurlait à qui voulait l’entendre qu’elle n’avait besoin de personne, patatras, cela n’a pas loupé : tout le monde se presse à son chevet.
Et il semble que la maladie soit déjà bien avancée. La situation est résumée en quelques mots lapidaires : l’Irlande est percluse de dettes. L’Europe, grâce au fonds monté à la hâte le 9 mai dernier en violant sauvagement la BCE dans une tournante à 16 sur la table du Conseil, va bien évidemment lui venir en aide : un gros Airbus A380 rempli de 90 milliards d’euros en petites coupures va survoler le pays en larguant les billets fraîchement imprimés, des leprechauns facétieux vont les ramasser et les redistribuer généreusement, et – hop ! – le petit bobo irlandais sera terminé. Evidemment, à ce point de la catastrophe en cours, on observe très globalement deux réactions. Non. Sans blague ? 'No more black holes' in Ireland's banks, says central bank governor | Business. Anglo Irish Bank was run by the now bankrupt Seán FitzPatrick.
Photograph: PA Ireland's top banker today claimed there were no more black holes in the country's banks as share prices jumped in the wake of the state's €85bn (£72bn) rescue deal. In a bid to reassure financial markets, Central Bank of Ireland governor Patrick Honohan said there was no sign of further catastrophic losses despite fears in some quarters that the International Monetary Fund and European Central Bank teams that arrived in Ireland 10 days ago would find new problems. "I think some of the people from outside came in saying 'we'll probably find a hole'.
They didn't find a hole," he said. In the first trading since the details of the bailout were revealed on Sunday, Bank of Ireland stocks were up more than a fifth to 32 cents while Irish Life & Permanent soared more than 50% to 83 cents. Honohan said officials wanted the headquarters in Stephen's Green closed to lay to rest the ghosts of past excesses. Irish budget praised by European commission as 'tough and ambitious' | Business. The European commission has hailed Ireland's austerity budget as "tough and ambitious" but accountants have warned that the Irish people face many years of painful tax rises and spending cuts.
Speaking in Brussels, EC spokesman Amadeu Altafaj welcomed the measures announced by Brian Lenihan yesterday, which were passed last night in the Dáil. "It is a successful first step towards the implementation of the programme that was agreed with the EU and the IMF," said Altafaj. "It is an ambitious and indispensable tool for the redressment of the situation. There is the right balance between revenue and expenditure measures. " The measures contained in the budget will save around €6bn (£5bn).
They include a 4% cut in social welfare, €10 a month reductions to child benefit, and rises in petrol and diesel duty. The austerity measures will allow Ireland to tap into the €85bn fund agreed with the International Monetary Fund (IMF) and the European Union. Irish lawmakers clash over bailout | Business. Finance minister Brian Lenihan to whom critics say the bank reforms would grant excessive power. Photograph: Julien Behal/PA There have been angry exchanges today between the government and opposition deputies in the Irish parliament over the legislation to reform banking and accept the €85bn (£71) IMF/ECB bailout. Irish Labour's finance spokeswoman Joan Burton said that the powers granted to the finance minister Brian Lenihan over the banks created "a one man hierarchy", likening it to something you would see in North Korea.
Earlier today, Labour and Fine Gael had indicated that they would support that part of the legislation dealing with the banks as they were in favour of many of the reforms envisaged in the bill. After careful study, however, the two main opposition parties have expressed concern over the powers it would give to the finance minister. Opposition parties have complained that insufficient time has been allocated to debate the legislation.
Ireland bailout ratified by Dáil | Business.