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


Email Updates

Receive our lunchtime briefing straight to your inbox

More in this Section

ComReg wants overhaul of ‘lo-cost’ phone numbers

Cybercrime is ‘bigger than global drug trade’

Voxpro: The €150m firm that began life with six staff above a Cork pub

Shannon-based company buys Swedish firm for €7.9m


Breaking Stories

US stocks tumble to worst loss in three months

Starbucks founder questions America's 'moral fibre'

Report shows 11% rise in '.ie' domain registrations

Voxpro in jobs pledge after €150m takeover

Lifestyle

Digital distraction: Are smartphones dumbing down students?

Against the odds: Life after ectopic pregnancy

Celebrity Masterchef Yvonne Connolly on cooking up a storm with leftovers

Can experiencing awe really make us better people?

More From The Irish Examiner