Sunday 19 November 2017

Reality fails to match FF spin The reality Lenihan's view The reality Lenihan's view The reality Lenihan's view The reality

Lenihan's view

EMMET OLIVER

Ireland was "bounced" into taking an EU/IMF bailout by the ECB.

The reality

Ireland's borrowing costs were rising to unsustainable levels long before the rescue, hitting 8.41pc on November 23 when the EU Commission started talking about the package Ireland might need. Deposits at Bank of Ireland and AIB fell by a combined €22bn between June and November. Irish banks couldn't raise external funding and without ECB help a full "bank run" might have taken place.

Lenihan's view

The major "force of pressure" for a bailout came from the ECB.

The reality

The markets themselves were discussing a bailout throughout the second half of 2010, particularly after Ireland cancelled all bond auctions in October. One of Europe's biggest banks, Barclays, was saying in September Ireland might need to call in the IMF/EU.

Lenihan's view

The ECB was involved in the "betrayal" of Ireland and the Government.

The reality

In fact, the Irish banking system was under serious pressure long before the bailout, with international depositors pulling €10bn out of Irish banks in October. Irish banks had to get funding from the ECB to replace much of these deposits. Deposits in Irish banks also fell by 6.7pc in November.

Lenihan's view

The EU Commission was relaxed about Ireland, but the ECB wanted Ireland "nailed down".

The reality

Overall the ECB was, by November 12, 2010, lending Irish-based banks a total of €130bn. In October and November it also bought Irish bonds on the secondary market trying to bring down Ireland's borrowing costs. ECB president Jean-Claude Trichet also publicly backed the Government's €15bn four-year plan.

Irish Independent

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