Bloomberg News

Irish May Need 2nd Bailout Even With Debt Relief, Citigroup Says

July 05, 2012

Ireland will probably need a second bailout even if it succeeds in moving the cost for bailing out the former Anglo Irish Bank Corp. to a European fund as its economy contracts, Citigroup Inc. said.

“Ireland may be able to shift a sizable portion of the bank debt, but I doubt European parties will agree to shifting all of it,” said Michael Saunders, chief European economist at Citigroup in London, in an interview. “Ireland will probably still need a second bailout.”

Ireland may be able to move about 31 billion euros ($39 billion) in promissory notes used to rescue Anglo Irish to Europe’s permanent bailout fund, according to Saunders. That probably won’t be enough to allow Ireland to avoid the need for more official aid when its bailout runs out at the end of next year, as Europe’s debt crisis weighs on growth, he said.

To contact the editor responsible for this story: Finbarr Flynn at fflynn3@bloomberg.net


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