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Posts Tagged ‘European Commission’

Cyber Attacks Force EU to Close Emission Trading System

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, Natural science, Quantitative Finance, Technology, Trading software, Uncategorized, Views, commentaries and opinions on 22.01.11 at 03:15

A series of cyber-attacks on national registries, where carbon permits are stored, have forced the EU to close its emissions trading system (ETS) for at least a week. The European Commission posted the announcement on its website on Wednesday after Czech Republic-based firm Blackstone Global Ventures said about €6.8 million of carbon allowances appeared to have disappeared. Thefts on electronic registries in Austria, Greece, Poland and Estonia have also been reported over the last days.

“They will over time undermine the credibility of carbon trading as a policy measure.”

Kjersti Ulset


After discovering unauthorized trading on its account on Wednesday, Blackstone contacted the Czech registry OTE AS, which promptly closed all operations and began an investigation. The Paris-based BlueNext SA, operator of the world’s biggest spot exchange for permits, followed suit, as did registries in Poland and Estonia, before the EU finally imposed a region-wide shutdown.

It’s not the first time cyber criminal have been trading stolen permits at the international ETS market, but never has the activity been so comprehensive that the regulators have been forced to close the whole market.

“Incidents over the last weeks have underlined the urgent need for enhanced security measures,” the EU commission says in its announcement of the closure.

The bloc’s ETS system will be down, at least until 26 January.

Full statement

Q&A’s

A Criminals Market

According to The Guardian, European Authorities estimate that up to 90% of the whole market volume is plain fraudulent activities.

Belgian prosecutors highlighted the massive losses faced by EU governments from VAT fraud today after they charged three Britons and a Dutchman with money-laundering following an investigation into a multimillion-pound scam involving carbon emissions permits.

The three Britons, who were arrested last month in Belgium, were accused of failing to pay VAT worth €3m (£2.7m) on a series of carbon credit transactions.

European authorities believe the EU has lost at least €5bn to carbon-trading VAT fraud in the last 18 months.

Last month, the European police agency Europol reported that the European Union’s Emissions Trading Scheme had been victim of fraudulent trading activities over the past 18 months, worth €5 billion for several national tax revenues.

Europol, the EU’s law-­enforcement operation, fears the fraud will be used in other areas, especially gas and electricity trading markets, after criminals found VAT fraud was one of the most lucrative financial frauds.

The Most Lucrative Financial Fraud

Wednesday’s announcement and similar cyber-attacks have also damaged the EU initiative, together with reports of tax fraud and the recycling of used credits, the EUobserver.com reports.

“They will over time undermine the credibility of carbon trading as a policy measure,” says Kjersti Ulset, manager at Point Carbon, a company that reports on Europe’s emission trading, carried out in a network of registries across the union.

Despite its pioneering position, Europe’s ETS system has attracted criticism over its six years of operation, with some businesses saying it threatens the bloc’s competitiveness, while NGOs argue emission thresholds have been set too high.

By placing a price on carbon, Europe’s trading system is designed to lower company emissions and therefore protect the environment from global warming. Corporations received emission permits for free under the first phase (2005-2007) of the scheme. Some, however, are forced to pay for a portion of their permits.

The European emission trading system is the world’s largest, as the US plans for a similar cap-and-trade scheme was blocked by the US Senate last year.

Carbon permits are, however, traded as ordinary securities at the Chicago Carbon Exchange.

Brussels wants to see energy companies buy all their permits with their own money from 2013 and onwards, with other heavy industries gradually phased in by 2020.

China experts suggest pilot ETS projects could appear in Beijing’s next five-year plan, set to be approved in March.

Here at The Swapper we have been skeptical to the ETS all along.

It’s an artificial market, created on basis of nice thoughts, without a real supply/demand situation and is regulated in a way the is more similar to a pharmacy than a financial market.

But what is really worrisome, is the sharp increase in this kind of activity.

Just wait till you see the Chicago Board Option Exchange gets hacked!

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Yippee! Another European Stress Test Festival!

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, Quantitative Finance, Technology, Views, commentaries and opinions on 20.01.11 at 04:46

EU finance ministers have Wednesday agreed on the broad outlines of another stress tests on major European financial institutions. I’m not really sure what happens during an European Stress Test, but it seems to make a lot of people happy. Perhaps it’s some kind of big party – like a festival, or something.  Anyway – I’m sure it will be fun.

“The euro zone debt crisis could last another ten years.”

Gyorgy Matolcsy


And this years stress test will be even better than last year, when they somehow forgot to invite the Irish, the prominent people of Brussels promise. But, like last year, the organizers are not sure if they will tell us all about it, or not.

Please forgive the sarcasm, but if the new European Banking Authority is going to be taken just a little bit serious, the stress test has to be conducted with total transparency.

Nothing less will ever be able to restore the lost confidence in this maneuvers.

“We are going to draw the lessons by making the next tests more rigorous and even more credible,” says internal market commissioner, Michel Barnier, at the end of a two-day meeting between Europe’s economy chiefs in Brussels.

The new stress tests will this time also take into account underlying capital, liquidity and exposure to sovereign debt.

In July last year, the financial strength of 91 institutions was tested against potential crisis situations. Only seven failed the examination.

The methodology this time, which will imagine even more severe crisis situation, notably in property markets, has yet to be agreed upon, but will be undertaken by the new European Banking Authority, with ministers expecting the tests to be completed by the end of May.

The level of disclosure once the results are concluded however remains a point of division amongst ministers.

The new test comes as Portugal, currently in the euro zone’s sovereign-debt emergency room, sees increased pressure on its bond yields, with rates climbing on 10-year bonds to 6.951 percent, shy of the seven-percent level thought to be the tipping point for the country to request a bail-out.

Meanwhile on Tuesday, the Hungarian EU presidency enjoyed renewed opprobrium from other member states when the country’s finance minister made the gaffe of publicly saying the euro zone debt crisis could last another ten years, the EUobserver.com reports.

Mr. Gyorgy Matolcsy made the comments during the public, televised portion of the meeting of EU finance ministers.

There is a likelihood “that the euro is endangered for another decade,” he says.

Well, that’s just what I pointed out in my commentary on New Years Eve.

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EU To Increase Bailout Fund, Brussels Demands More Austerity

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, National Economic Politics, Quantitative Finance, Views, commentaries and opinions on 13.01.11 at 02:13

EU economics and monetary affairs commissioner Olli Rehn calls for a substantial increase of the European bailout fund ahead of the meeting between European finance ministers next week. Mr. Rehn also issue a stark warning about all the deficit-slashing austerity measures that European states have so far imposed – it is not enough.

“There is insufficient ambition and a lack of urgency in implementation. That needs to change.”

Olli Rehn


Well, there is one thing the EU leaders absolutely not is lacking, and that is ambitions.  The economics and monetary  commissioner is asking for Europe to embrace structural reforms to bring an end to the debt crisis – by the end of this year.

“We need to review all options for the size and scope of our financial backstops – not only for the current ones but also for the permanent European stability mechanism too,” EU economics and monetary affairs commissioner Olli Rehn writes in an article in the Financial Times Wednesday.

“There is insufficient ambition and a lack of urgency in implementation. That needs to change,” he writes.

The commissioner, who calls for Europe to embrace structural reforms to bring an end to the debt crisis this year, wants to see changes to tax and benefit systems, reform of labor markets and pension provision, a loosening of business regulation and more investment in innovation.

“This calls for a comprehensive response by the whole EU and for bold fiscal and structural measures in all member states.”

He issued the call ahead of the unveiling of the European Commission‘s first annual growth survey, essentially a template with spending recommendations for EU member states, published as part of an effort to bring European-level coherence to national budgetary plans.

The EU member states are already considering an increase in the effective lending capacity of European Financial Stability Facility (EFSF).

While the EFSF kitty amounts to €440 billion, as more countries become borrowers from rather than guarantors of the fund, the actual capacity of the fund currently sits at roughly €250 billion.

Some governments favor a hike in the effective lending capacity to the full €440 billion, while others are looking to a doubling of the fund.

Member states are considering expanding the role of the EFSF to permit the common purchase of government bonds, an exercise which is currently the competence of the European Central Bank.

According to EU sources, any decision on the matter hinges on the result of government bond auctions this week, particularly Portugal’s trip to the market, EUobserver.com reports.

Mr Rehn told reporters Wednesday that “rigorous” cuts and “structural reforms” were necessary for Europe to emerge from its ongoing debt crisis and return to growth.

“Without major changes in the way the European economy functions, Europe will stagnate and be condemned to a viscous circle of high unemployment, high debt and low growth,” he said.

Adding the following warning: “Without intensified fiscal consolidation across member states, we are at mercy of market forces.”

(Now, that’s also an interesting perspective!)

The commission says that “bold” and “resolute policies” are needed to turn around weak projected growth of around 1.5 percent for the EU over the next ten years and 1.25 percent for the euro zone.

Brussels wants to see further cuts to budgets in 2012 on welfare reform – including more conditionality attached to benefits, and a raising of the “premature” retirement ages.

Labor markets should also be made more flexible and “strict and sustained wage moderation” should be maintained.

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Portugal Ordered To Apply For EU Bailout

In Financial Markets, International Econnomic Politics, Law & Regulations, National Economic Politics, Philosophy, Views, commentaries and opinions on 26.11.10 at 19:14

Portugal has been told to apply for a rescue from EU’s bailout fund (ESFE) so that Spain won’t be sucked into the black hole of sovereign debt, according to German media reports. Spain is seen as a more “systemically important” country than both Portugal and Ireland. Yesterday there was rumors saying that the European bailout fund don’t have enough money to bail out Spain if it comes to that.

“There is zero danger.”

Klaus Regling


The European Central Bank and a majority of member states in the euro zone are putting heavy pressure on the narrow Iberian nation to be the third country to tap the European Financial Stability Facility, according to a report based on unnamed sources in the Financial Times Deutschland.

European leaders and a number of analysts fear that should if Portugal should default, Spain would be dragged down with it.

While the debts of Greece, Ireland and Portugal are thought to so far be manageable, Spain would empty the euro zone’s emergency piggy bank, the EUobserver.com writes.

Lisbon is being told that if it applies to the facility, this would ease pressures on Spanish borrowing costs.

“If Portugal were to use the fund, it would be good for Spain, because the country is heavily exposed to Portugal,” the FT Deutschland’s source says.

The country’s borrowing costs climbed to near record highs on Thursday, with yields loitering around seven percent for 10-year bonds, while Spain’s 10-year bond yields climbed to a record 5.2 percent.

Meanwhile, according to Die Welt, the European Commission is trying to convince partners that the €440 billion EFSF needs to be double its funding – a proposal immediately rejected by EU’s paymaster, Germany.

Brussels however denies the report.

Axel Weber, German representative on the ECB board and head of the Bundesbank, says the existing total rescue sum – including €250 from the IMF and another €60 from the EU directly, should be sufficient, but that if not, more guarantees could be found.(printed).

“This should be more than enough to counter attacks on the euro zone. If it’s not enough, then one will have to increase this commitment,” Weber said.

However, other EU leaders are insisting on the fact that there is no existential threat to the euro, as suggested by some analysts.

Luxembourg Prime MInister Jean-Claude Juncker, (chairman of the group of states that use the euro), says he do not fear for the single currency.

And EFSF chief Klaus Regling says to German Daily Bild: “No country will give up the euro of its own will: for weaker countries that would be economic suicide, likewise for the stronger countries. And politically, Europe would only have half the value without the euro.”

“There is zero danger. It is inconceivable that the euro fails.”

I guess time will tell…

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So, Will We See QE3 In 2011?

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, National Economic Politics, Quantitative Finance, Views, commentaries and opinions on 26.11.10 at 04:04

The turmoil in the market for sovereign bond is now clearly spilling over to the corporate sector, and particularly into the financial industry. The banks perceived by investors as the weakest, are getting their insurance premiums kicked up by a substantial amount of bp’s, that in turn raises the banks funding costs, and not every bank in Europe has a wealthy tipple-A government to back them up. According to the German Die Welt Online is the EU commission ready to double the EUR750 billion bailout fund that was established earlier this year. I think I see the QE3 on the horizon.

“This topic is one to watch over the coming days.”

Gavan Nolan


Given the recent turmoil with Ireland, Portugal and Spain, several EU leaders are now considering a significant increase of the euro zone’s 750 billion euro rescue fund. According to Die Welt Online Thursday, the EU commission have already suggested to double the fund. The German government, the ECB  and the Bundesbank have spent the day trying to put out the fire.

Die Welt also writes that Germany –  the economically strongest member of the European community – is rejecting the plans, at least the time being.

After the Irish bailout, the focus is now mainly on Portugal and Spain.

Both countries are under heavy financial pressure these days as their CDS spreads just keep getting wider. This has led investors to doubt that the 750 euro bailout mechanism – The European Financial Stability Fund – that was rushed through the EU parliament earlier this year will be enough to cover even Spain alone if they should ask for help.

In response to questions in Paris Thursday president Alex Weber of the German Bundesbank said: “If the amount is not enough, we can increase it.” Adding: “An attack on the euro has no chance of success.”

I can’t help wondering who these evil attackers of the euro is? The Chinese?

Mr. Weber’s statement might also be interpreted as another way of saying: “We’ll print as much money as we need.”

Die Welt reports that the rest of the fund – assumingly 440 billion euro – could be claimed in the coming months by other countries in the euro area.

Spanish banks have been among the worst performers in recent weeks amid fears over the sovereign’s strength.

“The Markit iTraxx Europe is now 8.5 wider since this time last week and has returned to the levels seen at the beginning of October. Considerable widening in bank spreads, driven by sovereign credit deterioration and talk of burden sharing, has played a major part in the index losing ground,” credit analyst Gavan Nolan writes in Thursday’s Markit Intraday Alert.

Given the Thanksgiving holiday in the US, it was no surprise to see this trend continue today.

Sovereigns were buffeted by headline risk – no change there.

Brian Lenihan, Ireland’s finance minister, insisted that the crucial December budget would be passed by parliament. But the coalition government’s slender majority is expected to be reduced by one if it loses a by-election today, as predicted by the polls. And Enda Kenny, leader of the opposition party Fine Gael, pledged today that he would not be bound by the recent austerity programme.

“Ireland received another blow when LCH Clearnet announced that it would be increasing its margin requirement on the sovereign’s bonds from 30% to 45%, the third rise such rise in as many weeks,” Nolan notes.

Ireland’s spreads widened beyond 600 bp’s Thursday, before recovering later in the session.

German officials, perhaps mindful of their perceived role in exacerbating the current crisis, had a very busy day, trying hard to support the alleged economic recovery.

Angela Merkel stressed that the existing European Financial Stability Fund would not be changed before it expires in 2013.

“German ambiguity around this issue has contributed to the recent widening,” Gavan Nolan at Markit points out.

“There have been rumours that the EFSF would be increased in size, and this topic is one to watch over the coming days,” he concludes.

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  • Markit iTraxx Europe 107.5bp (+0.5), Markit iTraxx Crossover 483bp (+1)
  • Markit iTraxx SovX Western Europe 180bp (0)
  • Markit iTraxx Senior Financials 157bp (0)
  • Sovereigns – Greece 950bp (-22), Spain 301bp (+1), Portugal 480bp (-2), Italy 204bp (+2), Ireland 585bp (+4), Belgium 151bp (+2)

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Merkel: An Exceptional Serious Situation

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, National Economic Politics, Views, commentaries and opinions on 24.11.10 at 14:23

German Chancellor Angela Merkel says that the euro is in an exceptionally serious situation, adding that politicians a year ago could not imagine what’s happening now. The German Chancellor’s statement Tuesday afternoon pushed the euro further down vs the dollar , and raised the yield on Spanish and Portuguese bonds. Later in the evening Standard & Poor’s lowered Ireland’s debt rating by two steps, with a negative outlook. The nightmare continues today.

“The financial stability of Europe is at risk.”

Lars Løkke Rasmussen

Late Tuesday evening  Ireland’s debt rating was lowered two steps by Standard & Poor’s, with a negative outlook. The Irish prime minister Brian Cowen prepares to unveil the four-year deficit-cutting plan, as the European Commission warns the Irish politicians not to topple the government.  Meanwhile, the contagion spreads like fire through the rest of the euro zone.

“The Irish government looks set to borrow over and above our previous projections to fund further bank capital injections into Ireland’s troubled banking system,” S&P’s says in a statement.

Brian Cowen

Adding that putting the rating on review for downgrade reflects the risk that talks on a European Union-led rescue may fail to stanch capital flight.

S&P’s cut Ireland’s long-term rating to A from AA- and the short-term grade to A-1 from A-1+, according to the statement.

The reduction leaves its long-term grade five steps above Greece, which has the highest junk, or high-risk, grade, Bloomberg reports.

Still, the euro – which dropped 1.9 percent against the dollar yesterday – rose 0.2 percent to $1.3336 as of 11:12 a.m. in London.

The yield on Ireland’s 10-year bond was little changed at 8.61 percent after jumping 34 basis points yesterday.

Exceptional Serious

“I don’t want to paint a dramatic picture, but I just want to say that a year ago we couldn’t imagine the debate we had in the spring and the measures we had to take,” German chancellor Angela Merkel said in a speech in Berlin yesterday.

“We are facing an exceptionally serious situation as far as the euro’s situation is concerned.”

Olli Rehn

The European Commission also on Tuesday issued a veiled warning to the Irish political class not to topple the government.

“Stability is important,” EU economy commissioner Olli Rehn said, speaking to reporters in Berlin.

“We don’t have a position on the domestic democratic politics of Ireland but it is essential that the budget will be adopted in time and we will be able to conclude the negotiations on the EU-IMF programme in time. The budget needs to be adopted,” Mr. Rehn said, adding:  “Ireland will pass the budget in the time foreseen and certainly sooner than later.”

Financial Stability At Risk

Lars Løkke Rasmussen

Danish prime minister, Lars Lokke Rasmussen, have announced that his government would participate in the euro zone’s bailout of Ireland alongside fellow non-euro-using-states, like Sweden, the UK as well as Switzerland and Norway.

“The financial stability of Europe is at risk so it is very important to make a broader effort to try to stabilise the situation,” Mr. Rasmussen told the Financial Times.

Norway’s finance minister, Sigbjørn Johnsen, says in a statement that Norway will support Ireland through the International Monetary Fund, and suggest that the country might come up with additional support.

Sigbjørn Johnsen

“Norway will contribute to the financing of the IMF part of the loan package to Ireland through the financing arrangements we already have in place with the IMF, including our bilateral loan agreement with the IMF,” Mr. Johnsen says.

“We have not received any request for additional financial support. If we receive a request from Ireland for a bilateral loan, we will of course consider it.”


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Ireland: “We Have Surrendered Our Sovereignty”

In Financial Markets, International Econnomic Politics, Law & Regulations, National Economic Politics, Philosophy, Quantitative Finance, Views, commentaries and opinions on 20.11.10 at 03:41

The Irish-EU bailout talks in Brussels have really upset the Irish people, at least the people of The Irish Times, who writes in an editorial Friday that the country now have surrendered its sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund. Others call for prime minister Brian Cowen to resign.

“Politicians should certainly share some of the blame for Ireland’s ignominious position.”

Gavan Nolan


The Irish government has pledged to publish its four-year budget plan early next week as talks continue with IMF and EU officials in Dublin over a rescue package for Ireland, running into tens of billions of euro. Commentators call the whole thing a “shame,” while prime minister Cowen rejects the calls for his resign.

The dozen-strong IMF delegation includes several banking experts who are taking part in the discussions with more than 20 officials from the European Central Bank (ECB) and the European Commission and Irish officials at various locations in Dublin.

Prime minister Brian Cowen said Friday the talks were “going well in terms of being open and constructive,” saying the Government was conducting the talks “in a way for which the best outcome for Ireland can be achieved.”

Mr Cowen also rejected Opposition calls for him to resign, The Irish Times reports.

“The Government has a job to do here. We have a four-year plan that we are finalising which we are required to do,” he said. “We have a Budget to bring forward on 7th December. We believe we have a majority for that Budget and we have a job to do in relation to ensuring that the present issues affecting the euro, and as it is affecting Ireland, are resolved,” he says.

The Irish Times, however, makes a devastating attack on Cowen and his government in an editorial Friday morning.

“There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund,” the newspaper writes, referring to the impending bailout – or loan, as the government would prefer to call it.

Prime minister Brian Cowen, fighting for his political life, commented: “I don’t believe there’s any reason for Irish people to be ashamed and humiliated”.

The sight of the IMF delegation arriving in Dublin have left many with mixed emotions.

“While politicians should certainly share some of the blame for Ireland’s ignominious position, it is the banks that are viewed as the prime instigators of the country’s slump,” credit analyst Gavan Nolan writes in Friday’s Weekly Credit Wrap from Markit.

The cost of supporting the sector has pushed Ireland’s budget deficit to a projected 32% of GDP this year.

Anglo Irish Bank is now 100% owned by the state and Allied Irish Bank is approaching that status.

“The latter bank posted an interim trading statement today, and it confirmed what the markets had feared. AIB has haemorrhaged EUR13 billion euros in customer deposits since the start of the year,” Gavan Nolan notes.

“This wasn’t a great surprise given the deposit withdrawals reported by Bank of Ireland and Irish Life & Permanent earlier this week. But it underlined the dependence of the Irish banks on funding from the ECB, a fact that is integral to the pressure being placed on Ireland to accept external assistance.”

AIB’s subordinated bonds dropped sharply after the news.

Subordinated debt was already falling in value following the “yes” vote for Anglo Irish’s debt exchange. This vote wasn’t for the exchange itself but a change in the terms that will allow the exchange to proceed.

Prices for lower tier 2 bonds were declining across Irish banks and elsewhere in Europe amid fears that such punitive exchanges could be implemented in other countries.

“It might be asked why bonds are being used as an indicator of sentiment rather than CDS. The derivative is often more liquid than the underlying bonds and thus more reliable. Often, but not always,” Nolan points out.

The chart above shows the number of subordinated CDS daily quotes received by Markit’s parsing service over the last few months.

It is clear that there has been a marked drop in recent weeks, particularly in AIB.

In truth, the Irish banks have never been among the most liquid in Europe.

But all three banks now have Markit Liquidity Scores of “4”, the second worst ranking.

“Liquidity has evaporated in tandem with the banks’ credit deterioration,” Gavan Nolan comments.

The bonds, on the other hand, paints a different picture. The number of weekly quotes for the three most liquid subordinated bonds issued by the banks has been on the rise in recent weeks.

“All have Markit Liquidity Scores of “1”, the highest ranking. This indicates that trading activity is centred on the bonds and in this case therefore they are better indicators of sentiment than the CDS,” Nolan writes.

But it’s the opposite for the Irish sovereign, which has highly liquid CDS.

Reports suggest that the EU/IMF delegation will reach an agreement with the government next week, according to Markit.

But the weekend will no doubt be a maelstrom of rumours and comment from undisclosed sources about the government’s four-year plan, which promises yet more pain for the Irish people.

“The soul-searching has just begun,” Gavan Nolan concludes.

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EU, Ireland Bailout Talks Starts In Brussels – Watch LIVE Press Conference

In Financial Markets, Health and Environment, International Econnomic Politics, Law & Regulations, Quantitative Finance, Views, commentaries and opinions on 16.11.10 at 22:48

The finance ministers of the euro zone countries are meeting in Brussels Tuesday night, with the aim of finding a solution to Ireland’s funding problems. Shortly before the meeting was about to start, the Irish prime minister made  a statement in the Irish parliament, saying that the  Government must find a credible, efficient and workable solution to its budgetary problems that will provide assurance to the financial markets and restore confidence and stability in the Irish economy. A bailout by the EU is still not an issue.

“Tomorrow this House will consider a motion to extend the current Bank Guarantee Scheme – the ELG Scheme – for a further year.”

Brian Cowen

Brian Cowan

Mr. Cowen made a statement in the Irish Dáil Tuesday evening, repeating that Ireland had made no application for external support and said there had been some “ill-informed” and “inaccurate” speculation about the Government seeking a bailout in recent days. At the same time the euro zone finance ministers met in Brussels, and the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) continues to work on a solution for the Irish banking sector.

“Given the current market conditions, there have been on-going contacts at official level with our international partners,” Cowen says.

“The Department of Finance is continuously in contact with these bodies. The engagement has been particularly intense in the run up to the budget and the four-year plan.”

Mr. Cowen says there is no doubt that financial markets has been extremely volatile over recent weeks and that the State needs to provide them with a level of reassurance.

“This is not an insurmountable challenge and, through working together with our partners in a calm and rational manner, we can resolve these issues and underpin financial stability in the medium and longer term,” he says.

“It is in all of our interests that we find a credible, efficient and above all workable solution that will provide assurance to the markets and thereby restore confidence and stability.”

Here’s a transcript of the full statement by Prime Minister of Ireland, Brian Cowan, issued Tuesday afternoon.

EU economic and monetary affairs commissioner Olli Rehn confirmed this afternoon that the European Commission was discussing a solution to Ireland’s banking problems with the IMF, ECB and Irish officials, The Irish Times reports.

“The real problems are in the banking sector,” not with the [Irish] Government, “but these are connected,” he says.

Brian Lehnian

“We have a very strong focus on the banking sector,” Mr. Rehn says.

Arriving over an hour late for this evening’s euro zone finance meeting after being held up in traffic, Irish finance minister Lenihan admitted that markets are “not being good to Ireland”.

However, he reiterated the Government’s position that the State remains fully funded until mid-2011.

So, while Stephen Colbert is trying to keep fear alive in the USA, Brian & Brian are doing an excellent job of keeping confusion alive in Europe.

Read more at The Irish Times:

Hour-by-hour game of wits to stave off bailout

Bailout worth nought without political reform

Taoiseach accepts intensive talks with EU partners needed

It is announced that a press conference will be arranged some time tonight. You can watch the press briefing LIVE here. (or click picture).


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