The European Union's Economic and Monetary Affairs commissioner, Olli Rehn, said on Tuesday that EU finance ministers have 'simply no appetite' for Irish bank senior bondholder 'haircuts' - - forced cuts in the amount of the debt owing.
The commissioner said the
restructuring of Ireland's banking sector should be done in line with
undertakings already agreed with the EU and the IMF.
The Fine Gael party's election manifesto, which was published yesterday, says imposing losses on senior bondholders in Irish banks would only be extended as part of a European-wide framework and would focus on Anglo Irish Bank and Irish Nationwide Building Society, which are being wound up.
Previously, Fine Gael had said that it could unilaterally impose losses on unguaranteed senior bonds, which amount to an estimated €15bn.
Minister for Finance Brian Lenihan
told reporters that there was “significant disagreement” between member
states on the issue of cutting the composite EU-IMF bailout fund rate of 5.88%.
One of the options that is being
discussed between Ireland and officials from the EU and IMF, is the possibility
of banks selling loans of about €100bn.
SEE: Finfacts article, Sept 30, 2010 -- the second anniversary of the issue of the State guarantee: Lenihan says failure of Anglo Irish Bank would "bring down" the country - - includes video clips of Prof. Morgan Kelly of UCD and financial regulator, Patrick Neary.
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