Review welcomes bank debt deal plans

In the latest review of the IMF/EU bailout programme, the Government welcomed the June 29 statement by the eurozone heads of state committing to “sever the pernicious link between the banks and the sovereigns and mandating the eurogroup to examine the situation of the Irish financial sector with a view to enhancing the sustainability of our well-performing programme”.

Whether the Government has been successful in getting some sort of a deal on the €64bn that has been pumped into bailing out the banking system will become apparent over September and October. As part of banking union plans tentatively agreed at the end of June, bank losses across the region could be hived off into a EU special purpose vehicle.

If Ireland can get a deal on restructuring bank debt, then it would go a long way towards helping the country make a full return to the markets. After all, stabilising the banking system forms a big part of the IMF-EU bailout programme.