Second troika bailout not on the cards, says Kenny

Taoiseach Enda Kenny said that Ireland has no intention of asking for a second bailout, and wants to be the first country to exit its programme.

Investors switched about 30% of government debt, due in 2014, for a new note maturing in 2015, marking the National Treasury Management Agency’s most significant move since bond auctions were suspended in September 2010 and the nation sought a rescue.

“We would expect to be out of the programme by the end of 2013,” Mr Kenny said in a Bloomberg television interview at the World Economic Forum meeting in Davos, Switzerland, yesterday.

“We have no intention of having a second bailout,” he said.

Minister for Finance Michael Noonan called the 2014 €11.9 billion maturity a “cliff hanging over us.”

Spreading out repayments may mean Ireland needs to raise less cash next year to finance 2014 needs and help avoid a second bailout.

Before the switch, the state had no bonds maturing in 2015.

Ireland’s October 2020 bonds, regarded as the nation’s benchmark, yielded 7.37% yesterday, down from 9.1% at the start of December.

“They just want to buy time,” said Ciaran O’Hagan, the head of eurozone rate strategy at Societe Generale in Paris.

“It facilitates the return to the market by smoothing the redemption profile,” he added.

“Ireland will be able to come back to the market if it substantially reduces its deficit.”

The NTMA may seek to undertake a further swap later this year, according to a person with knowledge of the matter.

The switch was a “tentative dip in the water,” Mr Kenny said, adding that it was “very successful.”

“So we look forward to whenever they decide to do the same again,” he said.

“But we are in a programme and we continue to make progress and meet all the conditions set down by the troika and ourselves.”

The Taoiseach also said he sees “growing signs of renewed confidence” among European leaders.

Ireland’s troika bailout partners are working on a common paper on a possible restructuring of about €31bn of promissory notes the State used to bail out the former Anglo Irish Bank.

The paper “will be very interesting and potentially very helpful,” he said.

“The troika themselves now realise that perhaps greater flexibility could be shown to a country like Ireland, which had to borrow very excessively before the facilities of the EFSF and the ESM actually came into being,” Mr Kenny said.

“It would be great to be able to be the first country to emerge from a bailout programme.”

Bloomberg


More in this Section

Battle of big forces at Ryanair

More public investment needed for Cork to thrive

Too early to tell whether prices and wages will rise

Little room for hot air in energy debate


Breaking Stories

Disney snap up slice of Murdoch empire with £39bn takeover of 21st Century Fox entertainment assets

Watchdog finds most paying too much for gas and electricity

General strike halts services and ferry routes across Greece

IT sector sees 56% rise in employment figures over five years

Lifestyle

Wishlist: Must-have Christmas gifts and the joy of Ikea

Timing is everything as The Frank and Walters revisit 'Grand Parade'

A question of taste: Eileen O'Shea

Eoghan O'Sullivan's picks his highlights of 2017

More From The Irish Examiner