FRANKFURT (MNI) – Irish Finance Minister Brian Lenihan is
considering turning to the European Financial Stability Facility (EFSF)
to assist the Irish banking sector, and may inquire at a meeting of EU
finance ministers on Tuesday whether banks themselves can access the
E440 billion European Financial Stability Facility, the Irish
Independent reported on Monday.
Citing a senior source, the paper said the Irish government insists
that it is funded well into 2011 and has not applied for financial aid,
although it is being strongly advised to do so by senior European
officials and the European Central Bank. Irish officials want funds for
the country’s troubled banking sector, not state coffers.
“There is no question about Irish sovereign debt — the question
remains about the funding of the banks. The banks are having trouble
getting money,” the paper cited the source as saying.
“The Irish State doesn’t need the funds. There are no negotiations.
People haven’t separated the two issues — the state and the banks. What
is the problem? The problem is about the banks, rather than the
sovereign (funds),” the source added.
Despite repeated insistence from the government that Ireland isn’t
looking for a state bailout, markets are not yet convinced, as evidenced
by Irish spreads reaching a new euro-high last week.
To boost investor confidence, the government may push forward the
publication of its four-year budgetary plan to next week, the
Independent reported. The paper also said that next year’s budget could
be released one week earlier than the initial December 7 date to calm
markets.
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