Gradual return to debt markets predicted
Ireland has not tapped the debt markets since it took a three-year, €85bn troika bailout in 2010.
The Government plans to dip a toe back in by issuing around €1bn of treasury bills in multiple tranches, starting in the next six weeks, according to a draft European Commission report obtained by Reuters from a German source.
Commission spokesperson Amadeu Altafaj described the document — part of a quarterly review of Ireland’s bailout programme — as confidential, and said its leak to media was “regrettable, unfortunate and irresponsible”.
The National Treasury Management Agency said last week it expected to return to short-term debt markets during the summer and to longer-term markets by early 2013.
The Government will need to issue €15bn of new debt net of rollovers before the bailout programme is completed at the end of next year, the troika report said.
It said Ireland’s bailout programme is progressing well, adding: “Though risks remain, Ireland is on track to gradually regain market access at acceptable yields.”
Outstanding risks include the possibility that banks will require additional recapitalisation, a loss of support for the programme among Irish citizens, and delays in easing bankruptcy and personal insolvency procedures.
The report cited widespread opposition to the €100 household charge as highlighting the risk that public support for reform and austerity might wane if people believe the burden is not being shared evenly.
“The difficulties experienced ... provide a reminder of the risks that the popular support for continued consolidation and reform might wane, especially if growth remains weak and unemployment high,” it said.
Delays in the implementation of a cut in maximum bankruptcy terms from 12 years to three, and the introduction of a resolution regime for insolvency are a “specific source of concern”, the report said.
Reuters
