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Dublin: 20 °C Wednesday 12 August, 2020

World bailout wrap-up: Ireland expects, and it’s just a matter of time

The eyes of the world are on Ireland – and their judgement is that we now “expect” billions and billions in help.

Brian Cowen will be hoping Angela Merkel's money will keep him laughing the way to the bank.
Brian Cowen will be hoping Angela Merkel's money will keep him laughing the way to the bank.
Image: Yves Logghe/AP

THE WORLD’S PRESS had made up its mind – this morning’s remarks from Patrick Honohan all but guarantee that Ireland will be accepting a massive package of financial aid in the coming days.

‘Ireland Central Banker Expects ‘Substantial’ Bailout’, the New York Times writes from Paris, noting that Honohan’s Morning Ireland comments were “the first such public suggestion from an Irish official”.

It adds that the admission had helped to fuel a stock market rally in Europe, with the world’s investors drawing confidence in the prospect of a solution being found to the current Eurozone debt crisis.

The Wall Street Journal’s Irish correspondent Quentin Fottrell leads on a similar tone. ‘Loan in ‘Tens of Billions’ Seen for Ireland’ is his headline, focussing on Honohan’s wording that the bailout – worth “tens of billions” – was an “expectation”.

“Opposition politicians said Mr. Honohan’s statement reflected the true state of Ireland’s financial situation and called for an immediate election,” Fottrell adds, mentioning this morning’s “unusually raucous” Dáil proceedings that saw Alan Shatter suspended.

Honohan didn’t see the prospect as “worrisome”, he however notes, offering that the bailout shouldn’t impact on the volume of cuts in the Budget.

Bloomberg, meanwhile, gives Brian Lenihan the precedence. ‘Lenihan Says Ireland May Ask for Bank Package as Bailout Nears’ is its headline, focusing on the minister’s Dáil comments yesterday.

“If these talks were to result in a substantial contingency capital funding” being made available should Ireland need it, but not being forced upon us, it “would be a very desirable outcome”.

Honohan’s remarks get second billing, with the focus on the “tens of billions” being offered likely being at an 5% interest rate, similar to that offered to Greece in April.

Pulling no punches

The British press is slightly more straightforward in its headlines. ‘Ireland set to tap €80bn loan as it opens door to IMF mission’ is the Telegraph’s headline, while the Guardian opts for ‘Ireland bailout worth ‘tens of billions’ of euros, says central bank governor’.

The Telegraph describes the mission as a “troika”, noting that Dublin insists on calling the meetings a “consultation”, and quotes Trinity College economist Brian Lucey as describing the entanglement of the Irish banking sector with the government as being like “an omelette that is impossible to unscramble”.

The Guardian, meanwhile, returns to the 5% interest rate, quoting an investor who said it was a more favourable rate than that offered elsewhere – one that would “metaphorically take the skin off your face”.

In a similar vein, the Financial Times’ headline is ‘Ireland likely to seek loan from EU-IMF’. Enough said.

Outside the Anglophone world

Germany’s press offers a slightly more partial tone. The Süddeutsche Zeitung’s headline stark headline reads ‘Bargaining for Help’, and opens thus:

The paradox of help: The Irish now see at last, that they urgently need credit in the realms of billions of Euro. Yet now they are the ones setting the conditions of the assistance, and not the awaiting rescuers.

Meanwhile it seems clear that the highly-indebted Ireland will receive financial help. It’s now just a question of in what form, and to what extent, the support will flow.

Der Spiegel, the country’s most respected news commentator, has a similarly blunt headline. ‘Ireland’s central bank chief expects billions in credit’, it says, with the worryingly knifey comment:

Now, the International Monetary Fund and the European Union are taking over the financing of the heavily-indebted country.

It remains baffled by how Honohan doesn’t find the concept of such borrowings ‘worrysome’, or his insistence that the bailout was not… well, a bailout.

The country’s biggest-selling daily, the tabloid-style Bild, also pulls no punches, insisting: ‘EU help for Ireland is only a matter of time’, with the sub-heading: ‘Government no longer rules out assistance’.

The pressure on Ireland is growing. The crisis over the island nation is pushing the Euro. Today’s price: just $1.35. Solid support from the EU rescue fund could help. Main donors: Germany.

Europe is waiting in the wings to bail out its next state. [...] Brian Lenihan suddenly admitted today that his country may have to resort to support from the Eurozone. €80bn is under discussion – much of it would have to come from Germany.

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About the author:

Gavan Reilly

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