Irish Opposition Balks At Bank Bailout, Moody’s Downgrades

The Irish Times is reporting this morning that the two main opposition parties, Fine Gael and Labour, want to delay the banking system’s recapitilasation until April, when the stress testing of lenders is complete.

The Labour Party is taking an even harder line,

Labour party leader Eamon Gilmore was even more emphatic, saying his party would not put any further capital into Bank of Ireland, AIB and EBS building society before renegotiating the bailout with the International Monetary Fund (IMF) and the EU…Under that renegotiation, Labour would insist on “burden sharing” with bondholders as part of bank restructuring, he said.

Moody’s just downgraded the unsecured bonds of some major Irish Banks.

We’ve consistently maintained the European debt crisis is all about the politics and it appears they’re moving against a unified solution. German Bundesbank President Axel Weber’s decision to pull out of the running to replace Jeane Claude Trichet at the ECB complicates matters even further.   This tips the balance toward a weaker Euro going forward, in our opinion.  (click here if chart is not observable)


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