Ireland has ‘limited safety margin for debt sustainability’

Ireland has a limited safety margin for maintaining debt sustainability and would benefit from a deal to reduce the cost of bailing out its banks, said Stefan Gerlach, a deputy governor with the central bank.

“Actions that would help reduce the sovereign-bank link and would improve debt sustainability could greatly enhance Irish prospects,” of exiting its bailout programme this year, Mr Gerlach said in Berlin yesterday.

Taoiseach Enda Kenny is adopting a two-pronged approach to help lower the burden of the €63bn bank bailout bill. He said yesterday he is “confident” of reaching a deal by the end of March with the ECB to restructure about €30bn of promissory notes used to rescue former Anglo Irish Bank.