‘Big bazooka’ plan could cut cost of Irish borrowing

The cost of Ireland’s borrowing could be significantly lowered over the next 15 months by the ECB’s ‘big bazooka’ plan to buy sovereign bonds as the country prepares to return to the markets.

But if the EU/IMF bailout programme fails to cut borrowing to sustainable levels, the Government would have to accept new conditions to have the ECB buy its bonds.

ECB president Mario Draghi said the monetary mechanism in each euro country was under threat, that there were severe distortions in the markets with interest rates diverging in different countries, while investors feared the euro would break up.