Bloomberg News

Ireland’s Enda Kenny ‘Absolutely’ Rules Out Second Bailout

January 12, 2012

Jan. 12 (Bloomberg) -- Ireland’s Prime Minister Enda Kenny “absolutely” ruled out a second bailout for the country, saying the government aims for a “tentative” return to international bond markets within a year.

“I don’t share that view at all,” he said in a speech at Thomson Reuters Corp. in London today, when asked about the possibility of the country needing another aid package.

Ireland sought a 67.5 billion euro ($88.5 billion) international rescue in 2010, amid concern that the nation’s banking woes would push it into bankruptcy. While the government is fully funded through 2013, Finance Minister Michael Noonan has said the state may try to test markets in the second half of 2012, after a two-year hiatus.

“We would like to see a tentative return to markets,” within a year, Kenny said, adding that imposing losses on holders of Irish bonds would be “self-defeating” for the country. “Why would investors want to invest in a country if there were writedowns.”

Ireland’s October 2020 bonds, regarded as the nation’s benchmark, yielded 7.92 percent today, compared with 8.15 percent at the start of November.

Ireland pays interest of about 3.8 percent on the 45 billion-euro bailout from its European benefactors and about 4.7 percent for the portion of the 22.5 billion-euro loan package it borrowed so far from the International Monetary Fund.

Citigroup Inc. Chief Economist Willem Buiter said on Jan. 9 Ireland should negotiate a stand-by second bailout plan in the event it can’t re-access markets by the end of its current program on favorable terms, according to Dublin-based broadcaster RTE.

Kenny said the country’s needs “shouldn’t be lost sight of,” because it is meeting its bailout targets.

“We have worked very hard as a government,” to meet the targets, Kenny said. “Ireland is measuring up on all of these achievements. We still need consistent support from Europe. I’m glad they appreciate the scale of the challenge we face.”

--Editors: Dara Doyle, Alan Crawford

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net


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