Government advised by Goodbody to apply for precautionary credit line

The Government should apply for a precautionary credit line before it exits the bailout programme at the end of this year, according to Goodbody Stockbroker’s economist Dermot O’Leary.

“A safety net for another year would provide the necessary time for Irish policymakers to grapple with existing problems without having market concerns. The rejection of the pay deal by public sector workers simply serves as a reminder of the banana skins that still exist on the way back to full market access,” Mr O’Leary said.

“Not only will this ensure continued scrutiny by external officials of reforms still to be carried out in Ireland, it also opens up the possibility of outright monetary transactions of Irish debt by the ECB. As we have seen over recent months, even the threat of such monetary policy support is enough to influence market yields in a positive way.”