Brussels, 22/11/2013 (Agence Europe) - Ireland says that exiting the aid programme without additional aid will not directly affect the ability of the ECB to intervene in Ireland again if new financial turbulence were to endanger the integrity of the eurozone.
“Not having a precautionary programme does not give us any advantage about OMT but it does not give us any disadvantage if there is a systemic risk in the Eurozone”, said Irish Finance Minister Michael Noonan on Friday 22 November on the fringes of the Eurogroup meeting.
Last week, the Irish authorities announced that, on 15 December, Dublin would quit the structural adjustment programme that it has been implementing in return for financial aid of €67.5 billion and it would not be requesting preventive credit from the European stability mechanism (ESM) (see EUROPE 10964 and 10963). This would mean that Ireland would not be eligible for the OMT bond purchase system, which the ECB says will only be activated for countries in receipt of aid from the ESM.
Noonan says this is the right decision and the lack of movement on the risk premium for Irish long-term debt, which has remained unchanged at 3.5%, show that the markets were expecting Ireland's announcement. In addition, two nationalised banks - Anglo-Irish Bank and Permanent TSB - each raised €500 million in non-guaranteed bonds on the money markets on Wednesday, with demand outstripping supply several times over, stated Noonan. (MB/transl.fl)