An Irish scheme to guarantee bank debts with a duration of less than three months has met with disapproval from Frankfurt. The European central bank is in favour of eurozone countries guaranteeing debt with durations between three months and one year. Ireland’s plan to guarantee even shorter term debt would mean different policies between member states.
An ECB opinion, signed by Jean-Claude Trichet, said: “Unco-ordinated decisions among members states should be avoided as they may involve a fragmentation of the euro area money market.” The ECB also noted that the scheme had no restrictions on the types of debt considered acceptable. Read more