irish

There are worries that a €11.5bn loan from the Irish central bank won’t be repaid, after it was discovered the loans were secured against Anglo’s loans to property developers. The Irish Independent reports:

Fresh doubts have emerged about the taxpayers’ final bill for bailing out Anglo Irish Bank after the Department of Finance admitted an €11.5bn loan given to the bank is secured on highly risky property loans. The Government has already earmarked €22bn for the nationalised bank, but if the €11.5bn loan remains unpaid it would bring the total bill to €33.5bn. Read more

Governor Patrick Honohan has dealt swiftly with the row over central bank staff taking their spouses along on trips, at the bank’s expense. The story broke yesterday, and by the evening Mr Honohan had announced an end to the policy. The total additional payment was €67,450, at an average (European) trip cost of €435 per spouse, with the 9 longer-distance trips accordingly more expensive.

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