Irish FinMin still holds out hope for ESM recapitalization of the Irish banks

Spain was able to break the sovereign/banking nexus by having the ESM bailout Spanish banks directly and leaving the sovereign out of the mix. Ireland, which went bust bailing out its over-leveraged banking system, wants the same deal. There has been lots of discussion along those lines but so far Ireland remains on the hook as a sovereign nation for the cost of the bailout.

If the ESM were to step in and recapitalize the banks, Ireland’s public finances would immediately recover to a very large degree. High social spending owing to unemployment will remain a drag on finances, of course.

One Comment

  1. hope dies last as they say.
    one must admit EUR holds pretty well amid risk-off. I think this is a pretty important thing to notice.
    I have just exited my EURUSD long (entered 2 days ago). Need to see how the general-risk evolves.

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