11.28.10

The Irish Bailout

Posted in Economics, Financial Markets, Politics and Policy at 7:11 pm

More or less what was expected.  €85 billion at 5.8% interest.  €10 billion in immediate cash to re-capitalize the banks, another €25 billion line of credit for the banks, and €50 billion to meet state budgetary needs.  Oddly, the Irish government must contribute €17.5 billion, mostly from the state pension system.

Most interestingly, a vague “permanent resolution mechanism” for restructuring debt was announced that will go into effect sometime in 2013, and that “may” require bondholders to take losses at that point.  That’s their long term solution to the contagion problem?  Wow.

1 Comment »

  1. EMichael said,

    04.05.11 at 8:51 pm

    Any chance of Ireland defaulting on their bonds and running away from the EU?

    Considering the US political system in its current state, I am considering retiring somehwere else.

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