We should probably view Ireland’s decision to exit its bailout sans precautionary credit line more like a scarf dance than a total strip show…
Ireland has evidently decided that the cost of not having a pre-arranged ECCL exceeds the cost of negotiating an ECCL under duress. The characterisation of ECCL/no ECCL = OMT/no OMT is too simplistic. The reality is a matter of degree. Not having an ECCL does not rule out OMT, it merely slows the ECB response down as an ECCL would have to be negotiated and approved first.
That’s because it’s ghostly and hard to spot. (And it is All Hallows’ Eve.)
First it was the buried announcement that Irish banks with government share ownership are about to get Spanish-style flexibility on deferred tax assets… (though not nearly as far as the Spanish proposal for tax-credit conversion) H/T Lorcan
Next it was Bank of Ireland’s stock rising by more than 4 per cent in Dublin late on Thursday. Read more
FT Alphaville began writing in detail about emergency liquidity assistance in the eurozone — that is, national central banks lending to stricken, but supposedly solvent banks on highly secretive terms, against collateral not accepted at the ECB — some two and a half years ago.
Throughout that period, the ECB’s precise oversight of this liquidity assistance remained in the dark. Despite the risk being taken by taxpayers, and despite the fact ELA effectively stopped the Greek, Irish and Cypriot banking systems from going under at various points. And despite procedures having been in place since 1999 for the ECB to restrict ELA by a national central bank if it endangers the rules of the euro (as used in Cyprus). Read more
And so to the Irish government’s international tax strategy, fresh out on Tuesday and making Ireland “part of the solution to this global tax challenge, not part of the problem” according to Michael Noonan.
Ireland has incidentally guided its 12.5 per cent corporation tax rate through its bailout. It even outlived Sarkozy’s presidency. Read more
You’ve read the FT story about Elliott Management getting involved in US litigation over Ireland’s special liquidation of the shell of Anglo Irish, IBRC, in a hurry earlier this year.
Now read the filing:
That’s 15 pages of Elliott’s alter egos questioning Ireland’s bid to shelter US assets of IBRC beneath Chapter 15, based on their holding $75m of the bank’s subordinated debt. Read more
There was just one detail missing from the exquisite tale of the repossessed flat now on offer at London’s most hideous luxurious residence. The owner.
Well — after perusing this “exciting opportunity” to own 988 sq ft of One Hyde Park — note the apartment number… Read more
And why this could well have been the best possible deal for Ireland.
________________________ Read more
Here’s the transaction doc from the Irish ministry of finance. Click through the pic for the full pdf:
Reuters flashes hitting now (we note):
07-Feb-2013 14:56 IRISH PM SAYS 20 BLN EUROS REDUCTION IN NTMA MARKET BORROWING REQUIREMENT OVER THE NEXT DECADE
07-Feb-2013 14:53 – IRISH PM SAYS IRELAND HAS REACHED CONCLUSION WITH ECB TO PUT IN PLACE MORE SUSTAINABLE PROMISSORY NOTE AGREEMENT
Click for the feed from the Irish parliament, where legislators have until the morning to pass an emergency bill liquidating Anglo Irish’s resolution company, unlocking a promissory note deal which might be on its way, before creditors of Anglo hit the LITIGATE button. Or something. (The entire prom note deal is needed by the Irish government before the notes’ next circa €3bn interest payment, because that’s what they promised the public.) Read more
*NOONAN SAID TO PLAN ANGLO IRISH SPEECH IN PARLIAMENT
A few hours later… Read more
Portrait of a returning peripheral sovereign, encore:
Speaking today, NTMA Chief Executive John Corrigan said that Ireland had made considerable progress in its phased return to the markets over the past year and, with the success of yesterday’s €2.5 billion syndicated bond sale, had eliminated the “funding cliff” presented by a €11.9 billion bond repayment due in mid January 2014. The NTMA intends to step up its re-engagement with the market during 2013 so that Ireland is positioned to successfully exit the EU/IMF programme. Its working plan is to raise €10 billion, subject to market conditions, of which one quarter has been achieved with yesterday’s bond sale. Mr Corrigan also said the NTMA would continue its regular auctions of short-term Bills, which recommenced in July 2012, with the first 2013 auction scheduled for Thursday 17 January. Read more
You know them when you see them, obvs.
Applying that rule of thumb… Read more
It’s bad enough having the most expensive bank bailout around. But not getting official recognition for it? Unbearable!
Luckily for Ireland, there’s a concerted effort underway to right that wrong… (h/t Nama Wine Lake) Read more
It’s the clause that makes German officials’ faces look like they’re struggling to keep their lunches down when someone mentions the prospect of write-downs on Greece’s official loans. The no bailouts clause! Article 125 of the EU Treaty: Read more
Chart from Michael Saunders at Citi (click to enlarge):
What that shows is a pretty dramatic fall in Read more
Ireland: Eurostat is withdrawing a specific reservation, expressed in April 2012, on the data reported by Ireland, relating to the statistical classification of National Asset Management Agency Investment Limited (NAMA-IL). On the basis of documents provided by the Central Statistics Office of Ireland, NAMA-IL is majority privately-owned, following the sale by Irish Life of its stake in NAMA-IL to a private investor. This is a necessary condition for a special purpose entity to be classified outside the General Government sector, pursuant to Eurostat’s decision of 15 July 2009 on public interventions during the financial crisis.
That’s from Monday’s Eurostat release on European government debts and deficits. Monday, perhaps not coincidentally, also saw names put on the announced sale of Irish Life’s 17 per cent stake in Nama Investment Ltd. Read more
Well, see if you can make out what they’re saying here.
Oh dear. Terrible pun.
Anyway — debt management trial balloon du jour? Read more
Chart du jour from the IMF staff’s Article IV report for Ireland — forecasting the path for Irish debt to GDP if a deal is reached with the ECB to reschedule those promissory notes, and if direct ESM equity replaced bank recaps under the bailout.
“Was today the day that the Portuguese PSI began?,” Macro Man asks, of the OMT.
They’re noting something curious about ECB seniority in light of Thursday’s revelations about the OMT. The ‘technical features’ confirm that the OMT will receive equal treatment with ordinary bondholders if a eurozone sovereign restructures its debt. But, in the Q&A, Draghi also confirmed that the old SMP bond holdings will remain senior. It will be first in the queue, ahead of bondholders and the OMT. Read more
After taking a look at Spain’s yearning for some debt relief we thought a look at Ireland was only fair.
For reference, the numerous capital injections made into Ireland’s banks now come to 41 per cent of GDP. That looks like this: Read more
Let’s start on a positive note on the volley of Markit PMI released Monday.
Spain’s PMI rose during August to 44, versus 42.3 in July… Read more
That’s Ireland getting about €1bn worth of long-dated amortising bonds away at a sale on Thursday… its latest step towards being able to tap private markets, post-bailout.
From the Irish debt office release: Read more
It feels increasingly weird to include Ireland in “the periphery”. It’s obviously not in “the core” or even “the soft core” because we’re pretty sure a country can’t belong to either of those clubs if it’s been on the receiving end of a bailout just two years ago and has had to take extreme evasive action to prevent almost its entire financial sector from imploding. And yet, Ireland looks impressive for a peripheral by some measures:
Banking crisis U-turn of the year?
From the WSJ’s Gabriele Steinhauser and Brian Blackstone: Read more
How far will Spain’s bad bank be like Ireland’s?
There’s a superficially similar structure. Read more
9 July 2012
Eurogroup Statement on the follow-up of the 29 June Euro Summit Read more