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THE EUROPEAN CENTRAL BANK’S Governing Council will probably be asked today for formal approval for a deal on Ireland’s promissory notes, as indicated by Michael Noonan last night.
The fortnightly meeting of the ECB’s top decision-making authority – of which Central Bank of Ireland governor Patrick Honohan is a member – is likely to discuss the matter today.
The state had been due to make the first repayment on the promissory notes – a form of IOU given by the State to Anglo Irish Bank, and then used by Anglo to access funds from the Central Bank – at the end of this month, with €3.06 billion due.
Last night Michael Noonan told the Dáil that while a deal was not yet completed, there was now general agreement that the first repayment could be replaced with a government bond.
This would not reduce the overall debt owed by Ireland, as it would still be due to pay the €3.06 billion at some other point in the future, but it would crucially mean that the government did not have to make a cash payment at the end of this month.
Bloomberg reports that Patrick Honohan will today seek formal ECB clearance to accept the bond-for-note swap – approval which is considered highly likely given the nature of Noonan’s public disclosure last night.
While the conclusion of a deal would be a welcome development for the government, which will claim the agreement of any deal as a major diplomatic victory, the details of the bond being ‘sold’ to IBRC are still yet to be disclosed.
While it is widely assumed that the bond would not be repaid until 2025, it is not clear whether the bond will mean what are called ‘coupon repayments’ – where bondholders are paid cash every year or so, as interest on those bonds.
If the bond does carry coupon payments, the overall effect of the bond could be that the State will pay more than the €3.06 billion it is due – though this could mean a net saving to the State given the effects of inflation over a 13-year period.
This morning Fianna Fáíl’s finance spokesman Michael McGrath said the deal, as indicated by Noonan, would assist Ireland’s re-entry into bond markets – and that this would be further strengthened if a deal for the 2013 repayment could also be made.
“This is a good first step,” he told RTÉ’s Morning Ireland, while stressing that the deal could only be seen as “an interim measure” while the government continued negotiations to deal with the total bill for the €31 billion in notes, which will cost almost €48 billion after interest.
McGrath said Ireland needed to secure not just a deal to manage the repayments of the promissory notes, but a deal to reduce the amount it owed.
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I wish to f.ck they would sort this out once and for all, I’m sick of all this, we need to move on, it’s been going on for last three years!!!
You, me and everyone else…
Sick to the teeth! I dont think they know what their doing themselves.
That’s it exactly Joe.
Hear, hear Joan. Bunch of muppets are “leading” Europe
I want to hear your opinion if it does indeed collapse so, I doubt you’ll be so gung-ho about it then.
give me back our old currency and forget about the euro hasn’t worked move on
Joan never said anything about a collapse.. Just to sort out the currency
Thank f**k I kept my collection of millennium 50p coins..looks like im gonna need them again!!
They will be worth way more as scrap than currency
I have two millennium punts. I may off
What I meant to say there was, “I have two millennium punts still. I’ll probably need a few more than that though.”
I also am blue in the face listening to this horse sh*te.. What ever is going to happen, I wish it would happen soon so we could start rebuilding our lives as best we can and try and move on.
@Yvonne, don’t underestimate the power of horse dung, well rotted is probaly going to be worth more than it’s equivalant weight of euros pretty soon
These rating agencies are directly funded by Wall Street which then send over their schrills to run the country when they get downgraded and need a bailout. The Con just keeps on going.
There’s are some problems with subject-verb agreement here Derek I’m afraid.
“Wall Street” is singular, so the the verb following it must also be singular. Hence, “Wall Street sends,” rather than “Wall Street send.”
There’s a similar error in the second half of the sentence. Specifically, the pronoun “they,” in “when they get downgraded.” “They” is plural, but the noun it refers to, “the country,” is singular. You need to either change “country” to “countries” or else “they” to “it.”
The word “schrill” doesn’t exist in English I’m afraid. Are you trying to say “shill”?
The capitalised “Con” is a problem too, because it’s not a proper noun. If you were go on to talk about the Lizard People who really control Wall Street, they would get a proper noun, but “con” is an (all too) common noun.
Sorry. Thanks for the English lesson.
Derek, you are right. Nine people in positions of financial power in EU today are ex- Goldman Sach. Seriously, no bs.
Jesus that was a bit harsh
Spailpin. I think you will find your own post is far from perfect. What’s the point anyway? Why criticise someone’s use of a language if unsolicited? Oh, well, I hope your dictionary is cozy and cuddles you at night.
“when they get downgraded.”
Should the quotation mark appear outside the punctuation mark?
spot on RP, the same guys were heroes a few years back when wee believed our own tripe
Are you for real Spailpin Fanach with your English lesson???????????
I am, yeah.
I also do punctuation…………….
Not very well, spailpín. That’s not exactly what anyone would call an ellipsis at the tail of that truncated sentence…
A co-ordinated shut down of this cursed currency and everyone return their punt, lira, mark etc,vaporise the bond holders.its a downward spiral that will end badly the longer it goes on.
The Punt, Lira, Franc etc had all been semi-pegged for several years (1979) before the eurozone was even established, and before that the punt was pegged to the pound sterling. Ireland would be ruined by re-adopting the punt and devalueing through large-scale printing to pay off loans. Not to mention, I really don’t think the people in power in the Irish Central Bank would even have the foggiest what they’re doing in such an event.
As shite as it is, we’re best off the way we are within the eurozone
Time to get the baked beans and bottled water in?
Let Germany and France have their own single currency let the rest of us get on with living our lives
Using what for money Gerry?
An Irish currency pegged to sterling most likely spailpin.
Pitchforks! Ha!
@swimtwobirds
The problem with pegging with sterling is this. Losing our economic sovereignty was a big issue in the election. I thought it was overplayed, actually, but it was certainly an issue. I don’t see how pegging with sterling restores that sovereignty.
Whatever impact we can have in dictating what goes on with the Euro, we can’t really tell the British what to do with their currently. And I’m not sure that I’d like to see an Irish currency rise and fall according to what goes on in a jurisdiction in which I myself have a vote.
@spailpin no, that’s actually completely wrong. We’re not in a position to be a fully exposed free floating currency, at least not at first. For defensive and pragmatic reasons it would be very, very much in our interest to peg to sterling. It’s really got nothing to do with being beholden blah blah blah. It’s the only logical thing to do if the euro goes under, it would be in the national interest.
Tell me then how will people pay their mortgages with the huge jump in interest rates and the increased cost of imports post euro? Sick of people flippantly calling for an end to the euro when the consequences are so huge.
The only problem with the Euro, is that the no’s don’t add up, it cannot pay its way without massive printing.
It’s that simple folks, it doesn’t matter if you love or hate the EU, doesn’t matter if you have a picture of Barroso or farage on your bedroom wall. It can’t pay its way.
It’s the European Pesos, or call it a day.
Talk about treaty, trade, currency exchange all fall on the above. It is just basic maths that have the markets rejecting the Euro.
But if the euro fails and interest rates do indeed spike severely, nobody, absolutely nobody, will be able to pay the mortgage. So what’s the big deal? Is the entire nation going to get evicted? Relax. All will be well.
@Ellen
Take no notice of Sailpin, just a troll exactly like the ones who give thumbs down to message of condolence etc…out to annoy, don’t give them any notice!
Which message of condolence did I give a thumbs down to Joan? Which messages have I trolled?
I own up to tail-pulling. I saw Derek’s tail and I gave it a good yank. But I don’t think I’m a troll and I certainly don’t thumbs-down messages of condolence.
Everyone is just sitting back and waiting to see that Germany & France will pull out of the bag. How long before the Euro will collapse or how long before German is compulsory in schools, actually how bad would that be are this stage.
Time to stand on your own 2 feet Pat.
I am going to start my own currency
Ya may as well. Sure haven’t we always been making them up!! I’ll us it too, what are ya going to call it?
“use it” not, us it
We could call it “The Grodie”.. We can vote on It. I’m voting yes.
“Where will the money come from,” Where did it all go ?, thats what I want to know.
Exactly!? Who do we all owe this “money” to? Every country in the world owes money, to who? It’s like a game we jus need t find the reset button
They must be just passing it around their friends, because we aren’t seeing any of it!!! Sure the poor aul fella from coillte is only getting around €300k a year.
Default was the reset button. And we didn’t press it……. but we still can.
I wouldn’t press the reset button just yet, I think if the right decisions were made now we could still fix it!! And be happy a long the way, this recession is killing people.
can any one break this whole delema down for me,
there is a lot of arm chair economists with self inlating opinions switching from this to the x factor and back. what i want to know is whats tangible to me.
i have a mortgage on a home that is worth a fraction of what i paid for it, i get paid in euros monthly, im very lucky, i have a job in sales, and thankfully im not behind on the mortgage thank god,
if the euro fails what will happen to my mortgage debt?
what will happen to peoples savings that are in euro (and which i as a sales man depend on people spending)
what will happen to the country as a whole
and will justin bieber and the x factor fuck off?
and can you explain your credentials to back up your opinion
im not being rude or pretentious, im genuinly worried about what will happen and i cannot believe any spin from any gov source for obvious recent reasons etc>
Self employed business man.
The Euro either folds, in which case we go to sterling in all likelihood, everything is converted. Rough but survivable. They open up the printing presses, and devalue the currency, think double digit inflation, worst case scenario and at the scale the ECB would be printing, it would be a risk, causing stagnation, low wage growth, high destruction of purchasing power. Your Mortgage decreases as high inflation destroys it.
Self employed business man and someone who reads lots of economic sites. Someone who knows that Italy’s projected debt of 157% in 2014, guarantees a default. Countries do not survive that in good times, never mind now.
People’s savings, will be denominated in a new currency, what the value of that will be. Given the wave of defaults coming in Europe, then the entire banking sector may go boom. They’ll try to stop that of course, but these are the same people that believed that having a currency for a country that produces Olives and muddles along and a country with factories that have 40k people in some of them making beamers, is going to work.
The key thing here is that the finance markets believe that the Euro is unsustainable and unrealistic in its current form, radical change is needed.
This just shows the simple, blindingly obvious flaw with the euro that the simple, blind, cretinous, politicians of europe ignored. Currencies have been national for a reason you clap hats! Different economies with different growth rates and economic conditions cannot share a single currency AND retain control over their fiscal policies. The euro is the financial version of esperanto, just not as successful.
I believe the Euro would have worked if the right decisions were made. You would think they wanted it to fail, and they are never going to fix it!!
I think “the markets” desperately want it to fail. A poster on a previous thread posted an interview with one speculator who stood to make a 65,000% profit if the Euro goes under.
That is not a typo.
Aside from the fact that more, weaker, fluctuating currencies must mean better business for speculators.
Things have to change rapidly. All this recession has done is made the rich, richer, and the poor, poorer. For 3 or 4 years now every decision they made has made things worse.
When has the budget ever been good in fairness. I don’t know of anyone who said I can’t wait for the budget.
“The budget” A.K.A ” bad news”
If they made the right decisions you would look forward to it.
@Sailpin
Read what I wrote I said ‘LIKE those who…’!
I don’t think this euro thing will ever catch on, good old bartering for goods works perfectly fine.
Bartering the best thing to do. Have friends in all places
What the papers say is that your wages and your mortgage would be converted to punts. The foreign banks would take the hit presumably. The problem is that imported goods like oil would skyrocket as no arab wants to be paid punts. Your new vehicle would be horsepower indeed and we’re not talking about tractors!
Get on with what Gerry, where will the money come from.
you will still owe your mortgage, your euro savings will convert to a heap of useless irish punts which will probably be pegged to something like the north korean yakadaka. a litre of petrol will cost the equivalant of 2 dollars, but you will need to fork out a shed full of punts for same, as oil is traded in dollars, like all other commodities and your wages will be roughly quarter of what they are now, if you have a job. berties pension will be adjusted to take devaluation into account because a deal is a deal
We will all be unable to repay our mortgages. So what?? I’ll meet you on the steps of the high court. We can go for pints. Just bring a wheel barrow full of worthless punts with you. It’ll be grand. They can’t throw us all in jail.
Die Hard 4′s “Fire Sale” is looking increasingly more appealing…..
Scary stuff…bruce willis that is ;-)
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