Tags: ECB | Rescue | Aid | Ireland

Report: ECB Mulled Activating Rescue Aid for Ireland

Monday, 27 Sep 2010 10:25 AM

The European Central Bank considered activating rescue funds for Ireland but in the end decided not to, a German newspaper said on Monday, citing government sources.

German business daily Handelsblatt said the unnamed sources told it the ECB had considered activating the euro zone's bailout fund and that some countries in the region had been told they should be ready to tap capital markets on Ireland's behalf.

"In the end, the decision fell against the plan," Handelsblatt said.

It did not offer direct quotes or further details about its sources.

The ECB would not comment on the matter but the framework agreement for the fund says it can only be activated on the request of a country rather than the central bank.

Any such request would be assessed by the Commission and the ECB before the final decision by euro zone finance ministers.

Dealers cited the report as one factor worrying European markets on Monday and driving German government debt - a refuge from concerns about other sovereign borrowers - higher.

Ahead of moves by Dublin to outline the total cost of the state's bailout of Anglo Irish Bank, ratings agency Moody's on Monday cut the nationalized lender's unguaranteed senior debt by three notches and its subordinated debt by six.

Euro zone countries set up the European Financial Stability Fund in May as a safety net for members of the single currency area to prevent the sovereign debt crisis, triggered by Greece, from spreading.

The borrowing vehicle, which is backed by 440 billion euros ($587 billion) of euro zone government guarantees, is due to run out in 2013.

The ECB said in June support for troubled countries should only be provided if market financing is no longer available.

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The European Central Bank considered activating rescue funds for Ireland but in the end decided not to, a German newspaper said on Monday, citing government sources. German business daily Handelsblatt said the unnamed sources told it the ECB had considered activating the...
ECB,Rescue,Aid,Ireland
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2010-25-27
 

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