Tuesday, February 8, 2011

The EU Plays Hard Ball. Good Luck!

Ireland is in need of a bailout but so are the German and French banks most exposed to a default. Trichet comes out today and tries to play hardball by declaring the deal has been worked out Ireland, now you must execute. Oh they may execute alright. They may execute the deal but in the definition that would cause serious problems. From the Irish Times, Trichet comments are below:

EUROPEAN CENTRAL Bank (ECB) chief Jean-Claude Trichet has reiterated his opposition to any debt restructuring by Ireland, saying the terms of the EU-IMF bailout plan for the State have been approved by “the entire world”.

In Brussels yesterday, Mr Trichet said the Irish rescue plan and that of Greece did “not comprehend” the notion of bondholders being compelled to take a “haircut” on their investments.

Ireland entered an €85 billion EU-IMF programme last November and Greece was bailed out to the tune of €110 billion last May.

“We have plans. The plans have to be executed, have to be implemented in the best fashion possible as has been the case the world over and it is very, very important in my opinion not to confuse things,” he said.

This is going to get really interesting. Ireland may in fact have more power and the EU knows that. Why else would the EU have offered to extended Irish and Greek maturity dates to now 30 years? Careful how you approach Ireland Jean-Claude.


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