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THE EUROPEAN UNION’S bailout fund says it has raised €3bn in new funds to help pay for its bailout of Ireland – paying an interest rate less than a quarter of what Ireland would pay to raise the money itself.
The European Financial Stability Fund says it successfully sold €3bn of new bonds which mature in February 2015, with a yield for investors of 1.77 per cent.
The bond will pay for the bailouts of both Ireland and Portugal, to whom the fund will lend around €24bn over the course of the year.
The EFSF had not offered much advance notice of the bond issue, and only yesterday had said it would launch a fundraising programme “shortly, subject to market conditions”.
The rate commanded by the EFSF – which is seen as a far more stable prospect than either Ireland or Portugal, as it has significant assets put forward by each of the eurozone’s 17 member states – is significantly lower than what either of the two states would pay to raise the cash themselves.
While the EFSF will pay an annual interest rate of 1.77 per cent to fund those bonds, Irish three-year bonds were trading second hand at 7.957 at 2pm Irish time – while Portugal would be asked to pay 16.66 for similar borrowings.
Today’s issuance marks the first time the EFSF has issued 3-year bonds, having usually restricted itself to longer-term loans in order to fund the bailouts of specific countries.
The EFSF has already disbursed €6.6 billion to Ireland, with just over half of that amount maturing in July 2016 and the rest in February 2022.
The EFSF will be incorporated into a more permanent bailout vehicle, the European Stability Mechanism, later this year.
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Headline is wrong E U not paying for bail out WE ARE and according to our dear leader it was not our fault !!!
The enslavement of the nation marches on. And still no resistance.
And this is one of the reasons why we are screwed.
Nothing more certain than the fact that people will give out about this without understanding it.
Would you care to inform those of us Tom that seem to have picked the article up wrong.
Given previous comments on thejournal.ie I suspect many will see the bailout from the troika as the source of our problems. Imagine the austerity we’d have without a bailout and being unable to borrow.
Good luck with that Tom. Everyone knows we´d have 2007 levels of spending without any need for borrowing if the IMF would just leave us alone.
Party line tom…..
Tom a bailout was forced upon us,austrity is now being forced upon us, with no thought given to the damage this does to society.We are still being charged excessive rates of interest on the bailout forced on us.How is a country with a working population of 1.8 million and declining suppose to pay back these debts.
tom, yes we had to borrow money.
why did we have to bailout the banks as a precondition to borrowing for the years shortfall?
ur party is a joke. thank god people are wakin up to it.
FG my arse, Continuity FF is all yis are
This country is fukd
Fukd good at that…
How else would you fund the State?
I love how none of ‘em can answer that question
Had we not been forced to take on bank debt, our defeceit this year would be roughly half of what it is now. Had we not written whatever cheque was necessary for the banks at the ECB’s behest, the markets would not be commanding such insane interest rates and we could have borrowed on the open market. Just saying…..
Try asking a school kid in Iceland Peter.
Thats right.
Keep it coming.
Schiesters!!
This is great news I would have thought. Cheaper borrowing for the country is surely good news? Great work EFSF. Keep it coming. :D
Sorry not good news we still pay the higher rate but as long as we keep saying Is feader linn in an American accent our great leader dame Enda will stand by us
“Sorry not good news we still pay the higher rate” what HIGHER rate are you refering to? the higher coupon rate we would have to offer investors in order for them to purchase Irish bonds?Ireland cannot not afford the cost of 7.957yield. John g mcgrath I think you may not really understand bond markets…then again it may be me who is missing the bigger picture either way Im sure some opinion will be shared.
Most of this cash will be handed to Feckin Anglo bondholders in a couple of days time.
Last year we had the Arab spring. This year we need a Celtic spring.
Let’s balance the budget this year. Increase taxes and decrease spending so that we don’t have to borrow any money. It will have to happen at some stage.
Now wouldn’t that be fun!
Nice dream but that really would be “austerity”! You´d see everyone missing the cash from the EU and IMF then!
I wasn’t being serious Neil ;-)
However the Govt. expect to tax us more while expecting us to increase our spending to stimulate the economy !
Just where they think we are getting this money from baffles me! Where in reality, the heavier we’re taxed the less we have to spend, resulting in business closures and more job losses and continuing the growing demand on social welfare which is one of the highest costs to the state right now and for the foreseeable future. Nothing they are doings helps change this.
But this is how they expect to get us out of the mess we are in? Blind to its obvious contradiction. Ireland I see it is only one of the first for this to happen, over the next 7-8 years this will be more frequently seen throughout Europe. If I understand things correctly, leaving the Euro would hurt us more while alleviating the Euro’s stress carrying heavily indebted countries like ourselves, resulting in a quicker recovery for it.
My believe how ever it may be viewed is that all this is leading to a point where all western countries will have no alternative but to accept a new currency, issued and controlled by the World bank or some new bank, giving the large international bankers what they have sought after since the start of the last century – Uncontested control of countries and their economies. Looking at the time line of everything that’s happened over the last 50 years cant be pure coincidence or put down to simple greed or stupidity, but seems a means for it to be accepted by the public while not drawing attention to it’s underlining advancement. Then again maybe I’m just mad :)
” it has raised €3bn in new funds to help pay for its bailout of Ireland ”
It is only a bailout if you don’t pay it back, otherwise it is called a loan in every other walk of life…
if people keep calling it a bailout, then lets not pay it back
Peter I like you (: (just to clarify….not in a creepy way).
Right, I guess I’ll have to sort out this mess out myself. Just let me go into the front room, fire up MS Paint, make a €50 billion euro note and be done with it. They can keep the change.
Two can play this game.
Since the EU institutions are staffed by schmucks, you should not expect much. Further details by searching in Google for “butler hanna mcdonnell fagan foley”
Cheers
A lowly colonial alien
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