Austerity is here to stay was the grim message from the ECB, and especially for countries with high debt.

Ireland’s massive banking sector largely located in the Financial Services Centre should not be under threat from the EU that worries about financial institutions sinking sovereign states, according to ECB executive board member Jorg Asmussen.

The ECB is expected to lower its interest rate today possibly to 0.5% in a further bid to kick-start growth and take the eurozone out of recession.

Investors and depositors with over €100,000 in savings will in future lose their money first when a eurozone bank fails, EU finance ministers have agreed, as part of a major step towards creating a banking union.

An international deal giving Ireland more time to repay its bailout loans is worth a lot to the country, Finance Minister Michael Noonan said.

Markets calmed down yesterday from all the excitement over whether the Cypriot economy and banks would implode as they sought an alternative source of funding having rejected the conditions for an EU/IMF bailout.

Amazingly nobody seems to want to claim credit for the great Cypriot bank raid, and it’s hard to find anyone with a good word to say about the “deal” which has put all of Europe into a Boylean “state o‘ chassis”.

A senior member of the European Central Bank has said Greece should be given more time and aid to get its financial house in order.

A deal on Ireland’s bank debt, which would scale down March’s €3bn repayment considerably, could be in place within weeks.

Finance Minister Michael Noonan has offered a sign of hope that progress has been made on Ireland's bank debt.

The ECB said it was under “heavy time pressure” to reach a deal with the Government on the €31bn Anglo Irish promissory notes, raising hopes the annual €3bn burden on the taxpayer could be eased.

A political crisis in Portugal threatens to plunge the euro back into crisis just as experts were cautiously predicting that EU economies would start growing again next year.

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.

France and Italy yesterday piled more pressure on the ECB to agree steps this week to reduce crippling borrowing costs for southern eurozone states.

The ECB must employ “exceptional measures” at times to fulfil its mandate of delivering stable prices, its president Mario Draghi wrote in an opinion piece aimed at calming German angst about the bank’s policy course.

The ECB will be happy to swap the €31bn of promissory notes, reducing the debt burden on taxpayers, if the right deal can be made, sources in Frankfurt say.

The ECB has officially acknowledged that it insisted on Irish taxpayers repaying all the €31bn owed to Anglo Irish bondholders to protect Europe’s banks.

A member of the European Central Bank's executive board said today that substantial challenges remain ahead for Ireland.

The country may yet have to pay a high cost for the deferral of the €3.1bn promissory note payment as the ECB is deeply unhappy with the deal and the extra cost to the exchequer may have to be made up in government spending cuts.

THE world’s leading nations were divided last night over plans to reduce global economic imbalances, with China determined to head off international criticism over its huge foreign exchange reserves.