Thursday 14 December 2017

Brendan Keenan: Growing debt crisis putting even bank rescues in shade

Brendan Keenan

Brendan Keenan

ONE swallow does not make a summer, and one falling leaf does not make winter. Especially not in August. Yesterday's government borrowing of very short-term loans, in a month when most financial market operators are sunning themselves on expensive beaches, is not the best test of the state of Ireland's credit rating.

But the winds have been getting chillier for some months, and the apparent doubling of the cost of those loans, as compared with a few weeks ago, will have caused more than a few shivers.

The most common explanation as to why this six-month money cost the Government 2.8pc, instead of 1.6pc as in July, was that it came a day after more bad news from the gaping maw that is Anglo Irish Bank. (One hopes it had nothing to do with the 'Daily Telegraph' mistakenly calling Anglo AIB several times in an interview with Central Bank governor Patrick Honohan. Especially when the governor "fumed at the mere mention" of Anglo. But it may not have helped).

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