Ireland claimed that a deal struck at a summit of eurozone leaders was a “game changer” for the country which would help it escape a second bailout.
The deal, sealed by leaders in the early hours of Friday morning in Brussels, will allow stricken banks to directly access the region’s rescue fund. The hope is it will enable Ireland to return to international bond markets.
Eamon Gilmore, Ireland’s deputy prime minister, said: “This is a massive breakthrough for Ireland and it changes the game in terms of our bank debt.
This deal will allow the country to recover much faster.” Under previous rules, rescue funds first had to be handed to governments before being passed on to troubled banks.
That way countries like Spain ,which has been forced to intervene to help its banks, had to take on additional debt, pushing up borrowing costs.
Dublin has lobbied hard for the changes, along with Spain and Italy. Germany had previously been resistant to the idea. Enda Kenny, Ireland’s prime minister, said the decision signalled a significant shift in eurozone policy.
“The fundamental principle of the European Stability Mechanism [rescue fund] providing the funding to break the link between the sovereign and the bank has now been established.
“What was deemed to be unachievable has now become a reality and that principle has been established and decided and agreed upon by the council, by the heads of government,” he said.
Mr Kenny said the arrangement would mean Ireland’s debt burden, including bank debt, could be “re-engineered” in a way which would relieve the burden on Irish taxpayers.
The cost of rescuing its banks will push Ireland’s debt to 116pc of gross domestic product this year, according to European Commission figures.
telegraph.co.uk
The deal, sealed by leaders in the early hours of Friday morning in Brussels, will allow stricken banks to directly access the region’s rescue fund. The hope is it will enable Ireland to return to international bond markets.
Eamon Gilmore, Ireland’s deputy prime minister, said: “This is a massive breakthrough for Ireland and it changes the game in terms of our bank debt.
This deal will allow the country to recover much faster.” Under previous rules, rescue funds first had to be handed to governments before being passed on to troubled banks.
That way countries like Spain ,which has been forced to intervene to help its banks, had to take on additional debt, pushing up borrowing costs.
Dublin has lobbied hard for the changes, along with Spain and Italy. Germany had previously been resistant to the idea. Enda Kenny, Ireland’s prime minister, said the decision signalled a significant shift in eurozone policy.
“The fundamental principle of the European Stability Mechanism [rescue fund] providing the funding to break the link between the sovereign and the bank has now been established.
“What was deemed to be unachievable has now become a reality and that principle has been established and decided and agreed upon by the council, by the heads of government,” he said.
Mr Kenny said the arrangement would mean Ireland’s debt burden, including bank debt, could be “re-engineered” in a way which would relieve the burden on Irish taxpayers.
The cost of rescuing its banks will push Ireland’s debt to 116pc of gross domestic product this year, according to European Commission figures.
telegraph.co.uk
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