Ireland to get debt relief deal by October
Tuesday 10 July 2012
The European Commission is to publish a proposal in October to allow the European Stability Mechanism (ESM) to take over bank debt owned and guaranteed by the Irish government. The deal comes after months of lobbying by Irish finance officials and ministers, who want to shift the burden of the €64 billion injected into Ireland’s banks since 2008. A summit, on 29 June, agreed that the ESM fund - which has yet to come into being - would be able to recapitalise banks directly once a euro-level banking supervisor is in place, a move that was put in place largely to ease the impact of the Spanish banking bailout on the state’s debt levels. Concessions for Ireland were also written into a summit statement. Irish Finance Minister Michael Noonan has said the deal should have a “positive effect on the markets” as Ireland begins to fund itself rather than relying on bailout funding.