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# Shock
Ireland can avoid a second bailout in 2012, says S&P
Some good news? Really? A senior director at Standard & Poor’s says we’ll be able to borrow without international help.
IRELAND WILL HAVE a “good chance” of being able to return to regular cash borrowing on the world’s money markets next year – and being therefore able to avoid needing a second bailout.
That’s the verdict of a senior director at ratings agency Standard & Poor’s, Frank Gill, who last night told reporters there was good reason to think Ireland can avoid requiring a second programme of loans.
The bailout programme, Gill said, “contemplates that Ireland will partially fund itself in commercial bond markets next year”.
“I think there’s a high probability that they can do that,” Bloomberg quotes him as saying, before offering the caveat: “But it’s highly uncertain at this point. It depends on market conditions.”
The reason for positivity on Ireland’s outlook was because of the stress tests finalised last March, which Gill said drew a line in the sand in terms of how much cash Ireland would need to prop up its banks.
“We think that throughout the EU-IMF programme, they [the banks] will meet all their targets and so won’t need net financing,” Gill said.
The prospect of Ireland needing a second bailout has dominated market discussions on Ireland since transport minister Leo Varadkar admitted in a Sunday Times interview that there was a significant chance Ireland could need further assistance.
The requirement for a further package would depend on whether the interest rate demanded of investors for Irish government debt returns to a sustainable level.
This morning Ireland’s interest rates for both 2-year and 10-year borrowing remained above 11 per cent.
Gill’s upbeat comments about Ireland come despite Standard & Poor’s rating Irish government debt at ‘BBB’, just a single grade above ‘junk’ levels.
