Tags: Ross | wilbur | Ireland | Banking | Crisis

Ross: Ireland Will Beat Banking Crisis in Two Years

Wednesday, 15 Dec 2010 01:28 PM

Ireland will overcome its banking crisis within two years, says investor Wilbur Ross, who is close to buying Irish financial institution Education Savings Bank with partners.

Ireland has passed an austere budget, slashed wages and agreed to help from the European Union and the International Monetary Fund to bail out its banks, which shows the country is serious about reform, Ross tells CNBC.

“Ireland has a very specific problem, we think they’ll overcome it in a couple of years,” Ross says, adding that companies looking for a place to conduct research and development should consider Ireland.

“Ireland has a very well educated, very young population, the lowest tax rate in Europe.”

Ireland's parliament has given the green light to the multibillion dollar bailout package despite calls from some political parties to renegotiate the deal and force losses on some senior bondholders in Irish banks, according to Reuters.

Finance Minister Brian Lenihan has said the center-right Fine Gael party's proposals to force senior bondholders in Irish banks to accept losses would fail because the European Central Bank (ECB) opposes such measures.

"Those who think we can unilaterally renege on senior bondholders against the wishes of the ECB are living in fantasy land," says Lenihan.

Under terms of the EU-IMF deal, Ireland will cut spending and hike taxes in return for money to prop up its banks and fully repay senior bondholders in the process.

Fine Gael politicians argue that investors holding senior bonds that are not guaranteed by the government should take a haircut and absorb some of the country's losses, which would prompt the country to borrow less.

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Ireland will overcome its banking crisis within two years, says investor Wilbur Ross, who is close to buying Irish financial institution Education Savings Bank with partners. Ireland has passed an austere budget, slashed wages and agreed to help from the European Union and...
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2010-28-15
Wednesday, 15 Dec 2010 01:28 PM
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