Image by Mesq via FlickrIreland's banks are now officially junk following a downgrading of the long-term deposit ratings of the four surviving banks by the ratings agency Moody’s.
The decision to downgrade Bank of Ireland (BoI), Allied Irish Banks (AIB), EBS Building Society and Irish Life & Permanent (IL&P) follows the move to cut Ireland’s own ratings status to one level above junk status last week.
In the meanwhile Athens repeated today it has no plans to restructure its debt, denying a Greek media report it had already requested talks with its lenders. Greek daily Eleftherotypia said today Greece had told the International Monetary Fund and the European Union earlier this month at a meeting of European finance ministers that it wanted to restructure its debt. Discussions on the issue were expected to start in June, the newspaper said, citing a senior IMF official. US treasury secretary Timothy Geithner had also told Greek finance minister George Papaconstantinou a restructuring would be needed, the paper said.
A further addition to the Portuguese's woes is the recent Finnish election where the party True Finns quadrupled its share of vote in Finland elections, and its party leader says he expects EU to change Portuguese bailout plans.
Unlike others in the eurozone, Finland's parliament has the right to vote on EU requests for bailout funds, meaning it could hold up costly plans to shore up Portugal and bring stability to debt markets.
The strong showing for the populist True Finns reflects growing public frustration in some EU states about footing the bill for weaker economies such as Greece, Ireland and Portugal.
Portuguese five-year credit default swaps climbed 26 basis points to 625bps this morning, according to data monitor Markit.
And this euro mess is bringing back the 2 elephants Italy and Spain in the arena with spreads reaching new highs:
- Portugal 625 (+26) - officially insolvent
- Italy 156 (+13)
- Ireland 588 (+21) - officially insolvent
- Greece 1225bp (+89) - officially insolvent
- Spain 250 (+16)
1 comment:
I believe the problem in greece simply came from governments buying votes with wages and pensions they would not have to pay for. This is an endemic flaw in any elective oligarchy where the public is insulated from decisive power and usually kept unaware of policymaking information.
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