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Ireland's "historic" debt deal with ECB

Thursday, February 07, 2013 - 01:40

Feb. 7 - Ireland has struck a long-awaited deal to ease the burden of debts it took on to rescue its banking system in a way that will cut its budget deficit and borrowing needs and put it on track to end its reliance on EU-IMF loans this year. Sonia Legg reports

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Anglo Irish is a symbol of Ireland's past. The bank no longer exists in name but its debts do as part of what's now called the Irish Bank Resolution Corp. And very early Thursday morning the Irish government was forced to rush through emergency legislation to liquidate it. The move was part of a wider debt restructuring plan by the bailout euro zone country. And later Ireland's Prime Minister announced he had won ECB approval to stretch the cost of bailing out the bank over 40 years. He called it "an historic step on the road to economic recovery." The ECB was not so enthusiastic and Standard Chartered's Thomas Costerg says he's not surprised. (SOUNDBITE) (English): THOMAS COSTERG. EUROPEAN ECONOMIST, STANDARD CHARTERED, SAYING: "They don't want to the see the Irish deal as a blueprint for the rest of the periphery and it comes as we are thinking about making rescues in Spain and Cyprus and all over the periphery and so they are really walking on eggs and I think they will be very cautious not to send a signal to the periphery in terms of moral hazard or infinite resources of Europe." Casino-style lending was at the heart of Ireland's financial crisis. Anglo Irish's near collapse in 2008 forced the government to guarantee the entire financial sector. That lead to a 68 billion euro bailout from the euro zone two years later. The bank's former CEO and two other ex-executives will go on trial next year on fraud charges. This break through is equally headline grabbing in Ireland. And it will no doubt to carefully watched, particularly by the countries which followed Ireland down the bailout road and haven't achieved the same level of recovery.

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Ireland's "historic" debt deal with ECB

Thursday, February 07, 2013 - 01:40