Seamus Coffey: A second bailout? Not a very helpful or relevant contribution from Willem Buiter
WILLEM Buiter, the chief economist with Citigroup, has suggested that Ireland needs to negotiate a second bailout in advance of the conclusion of the current programme at the end of 2013. While it seems very likely that Ireland will need continued official funding into 2014, it is not clear why he thinks such a complete bailout negotiation is necessary.
Ireland is fully funded until the end of 2013. Over the next two years the Exchequer Deficits will come to €34 billion and there is around €12 billion of maturing government bonds that need to be repaid. Ireland needs €46 billion of funding to get to the end of 2013.
There is about €34 billion of the original EU/IMF set of loans that has yet to be drawn down so this will provide the bulk of our funding needs over the next two years. The average interest rate on Ireland’s EU/IMF loans is now 3.5pc, down from nearly 6pc last summer.