EU extends state’s €400bn bank debt guarantee

THE state can continue to guarantee €400 billion of bank debt, some of it for up to five years, the European Commission has agreed.

The current guarantee was due to end today but was extended to give the banks a better opportunity to raise funds on the market over the next six months.

The seven Irish banks covered will need €74bn to roll over current loans towards the end of September but a leading economist has warned that they could find it difficult, even with the extended guarantee.