Ireland gets 3.6 billion euros from rescue fund: source

BRUSSELS Sun Feb 6, 2011 8:07am EST

BRUSSELS (Reuters) - Ireland has received a first tranche of 3.6 billion euros ($4.9 billion) from the euro zone rescue fund, slightly more than the initial amount agreed, a fund source told Reuters on Sunday.

The effective lending cost to Ireland was 5.9 percent, the source added.

The European Financial Stability Facility (EFSF) raised 5 billion euros from a debut sale of five-year bonds late last month.

The funds are to be used to help finance the 85 billion euro EU/IMF bailout of Ireland, which followed Greece last year in seeking a rescue to cope with the huge losses of its banking sector.

"As part of the EU/IMF financial support package agreed for Ireland, EFSF transferred 3.6 billion to the Republic of Ireland," an EFSF source said, adding: "Due to the successful issue, the amount transferred to Ireland was higher than the minimum 3.3 billion agreed."

The EFSF has said its Irish programme would include two more benchmark bonds of 3 to 5 billion euros each this year. It plans to issue 17.6 billion euros in 2011 and as much as 4.9 billion euros in 2012.

The EFSF's debut bond sale was done at implied borrowing cost of 2.89 percent.

(Reporting by Ilona Wissenbach; Writing by Philip Blenkinsop; Editing by David Holmes)

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Comments (5)
This may sound naive, but isn’t just a case of banks moving their money from one account in continental Europe to another account in Ireland? The 85 billion euro amounts to 19,000 for each man, woman and child in Ireland. That’s about 57,000 euro ($77,000) per household. Well over $100,000 per middle class household… So, really this is a case of banks helping banks. If we wanted to do something to stimulate the Irish economy surely, with that kind of cash, we could come up with a far more effective plan than just moving money from one bank to another. This is a bailout, alright. It’s a bail out by the ultra-wealthy of Europe, for the ultra-wealthy of Ireland (unless you happen to believe in “trickle down”).

Feb 06, 2011 8:58am EST  --  Report as abuse
MaddyWright wrote:
One can hardly imagine that 3.6 billion euros will suffice to sure up the Irish economy. It has been illustrated again and again that this international “derivatives” crises cannot be reconciled through asset relief and debt abatement programs. Nicholas Carangi, professor of economics at Australian National University, long ago predicted this world-wide financial crisis. With his warning, he also offered an incremental approach to amelioration, beginning with reinvestment of manufacturing and agricultural assets worldwide. The idea is that “real” production yields “real” employment. Simply speaking, tangible engagements produce tangible results. Manufacturing, when approached with a bit of parochial discretion, creates far more jobs than outsourced manufacturing. As is the same for agricultural developments.

Feb 06, 2011 11:00am EST  --  Report as abuse
GeyeJo wrote:
I can just hear my Irish friends joking about this, “We’re rich! Let’s all go out for a pint…”

Feb 06, 2011 3:37pm EST  --  Report as abuse
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