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Markets News Afternoon: Head of key European Parliament Committee says high Irish bailout interest rate 'spiteful'
By Finfacts Team
May 26, 2011 - 5:30 PM

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Sharon Bowles MEP, chair of the European Parliament's Economic and Monetary Affairs Committee, with Jean-Claude Trichet, president of the European Central Bank, Brussels, March 22, 2011.

The chairperson of the European Parliament's key Economic and Monetary Affairs Committee said today that she is outraged by the interest rate demanded form Ireland in respect of the EU-IMF bailout loans.

The interest rate has fallen slightly from a composite rate of 5.8% because of a change in IMF quotas.

British MEP Sharon Bowles said Ireland had the recipe to respond to the economic and banking crisis but is being treated harshly by its EU partners.

Bowles who was in Dublin today said Ireland had taken "one for the team" by bailing out banks as demanded by the ECB, adding she could see no reason why lending countries should turn a 3% profit.

"A lower interest rate would mean a faster recovery, which is surely in the interests of the EU and the ECB as well as Ireland.

"Of the three countries in programs, Ireland is performing best in class, so to suggest corporation tax measures in return for an interest rate reduction is simply spiteful."

Bowles also supported calls for a medium-term financing facility for Irish banks.

"Ireland would be helped if the ECB could give firmer commitment to medium term funding rather than repeated rollovers every 14 days," she said.
"Such measures would help prevent contagion from uncertainty about Greece."

Earlier this month, Bowles accused some European countries of "prevaricating" over the problems faced by their banks during the current raft of stress tests.

Following a European Parliament debate on the banking stress tests, Bowles said that while the stress tests have been improved under the European Banking Authority, member states have engaged in prevarication to avoid vulnerable issues their banks may face.

"It is about time the message sunk in that feeble political will is not the answer to this crisis and makes solutions more expensive," she said in a statement.

Not Crucial for European to Head IMF: Economist:

US Weekly Jobless Claims: The Department of Labor said today that in the week ending May 21, the figure for seasonally adjusted initial claims was 424,000, an increase of 10,000 from the previous week's revised figure of 414,000. The 4-week moving average was 438,500, a decrease of 1,750 from the previous week's revised average of 440,250.

The number for seasonally adjusted insured unemployment during the week ending May 14 was 3,690,000, a decrease of 46,000 from the preceding week's revised level of 3,736,000. The 4-week moving average was 3,742,250, an increase of 7,750 from the preceding week's revised average of 3,734,500.

US Markets

In New York Thursday, the Dow fell 41 points or 0.33% to 12,354.

The S&P 500 slid 0.18% and the Nasdaq added 0.24%.

Live US Indices

European Markets

The pan-European Dow Jones Stoxx 600 slipped 0.08% Thursday.

In Dublin the ISEQ has dipped 0.26%.

CRH fell 0.83%; Elan climbed 2.11%; First Derivatives jumped 8.30%.

European benchmarks

Irish share prices

Euribor Interest Rates

Commodities

Crude oil for July delivery is currently trading on the Chicago York Mercantile Exchange (CME/Nymex) at $100.21 per barrel down $1.11 from Wednesday's close. In London, Brent for July delivery is trading on the International Commodities Exchange at $114.64.

Currencies

The euro is trading at $1.4091 and at £0.8618.

Gold

Gold is trading at $1,520.80 per oz in New York.

The Finfacts Gold Page

Greek Minister: Default Not an Option:


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