It's a game-changer -- now Europe must deliver on bank debt
LAST night's successful bond deal shows investors believe this country is poised for recovery. Ireland has done all that's been demanded under the bailout. Now Europe must deliver, and quickly, on its side of the bargain.
Their failure now risks spooking confidence of the markets, and worse of wasting the sacrifices of the Irish people.
First things first. The €5.3bn deal done yesterday means that Ireland is unequivocally "back in the markets".
Borrowing billions for up to eight years from global investors that don't owe this country a second thought, never mind a loan -- is about a clear a signal as you can get. It's a huge success for the National Treasury Management Agency (NTMA), and for Finance Minister Michael Noonan.
The deal was executed with real finesse, taking advantage of a rare lull in the recent spate of market panics.
The NTMA fixed an interest rate it was willing to pay and invited investors to fill their boots.
That was a huge test of investor confidence.
The markets are all about confidence. Rightly or wrongly, success inevitably creates its own momentum.
It's why this is the first truly significant sign that we really can avoiding the dreaded second bailout when the current deal end at the end of 2013.
That chance is not a guarantee, but far better than no chance. Ireland cannot finish the recovery alone.
Yesterday, the European Central Bank chief Mario Draghi said Europe will do everything necessary to save the euro.
Those words need to translate into action. The deal to cut the cost of the Irish bank rescues has been in the works since June.
Investors have been convinced it will happen, but euro leaders have a habit of disappointing.
This time must be different. The bank deal must happen, must be significant and must be done soon.
Any backsliding risks driving Ireland's borrowing costs back into the stratosphere.
It would spark a fresh round of panic that would do huge damage to Europe's best hope of producing even one bailout success story.