* Imposition of debt losses “made at worst possible time”
* If Greece defaults, Ireland is next -ECB source
DUBLIN, Jun 19 (Reuters) - Ireland’s call to impose losses on senior debt in two failed lenders was simply a good soundbite and made at the worst possible time, the Sunday Times newspaper quoted an unnamed European Central Bank source as saying.
Dublin’s revival of its election pledge to go after senior bondholders in Anglo Irish Bank and Irish Nationwide coincided with its symbolic 100th day in office, prompting analysts to interpret it as a political manoeuvre. [IDn:L6E7HG028]
“It was a good soundbite for the cameras... Considering the Greek situation, it was the worst possible time for him (Finance Minister Michael Noonan) to make an impression,” the newspaper’s Irish edition quoted the source as saying.
The ECB, which until now has been the stumbling block to imposing losses on senior bondholders, has declined to comment on Dublin’s renewed interest in the banks.
The two lenders, which are in the process of being wound down after swallowing around 35 billion euros ($50.3 billion) of state capital, have more than 3.5 billion euros of senior debt with the first bonds maturing in November.
“By the time it comes to paying back the bonds next autumn, Greece may have defaulted. If Greece defaults, Ireland is next,” the source said.
The newspaper went on to quote the source as saying the ECB might come to the conclusion that it should stop funding Irish banks.
Irish banks, shut out of interbank lending markets, had borrowed 102 billion euros from the ECB and 54 billion from Ireland’s own central bank by the end of May. ($1 = 0.696 Euros) (Created by Padraic Halpin; editing by David Hulmes)