Ireland May Need Another Bailout

The Telegraph (h/t nc links):

As households struggle to pay their mortgages, the country’s rescued banks may need €4bn (£3.2bn) more to cover losses on loans than was assumed in stress tests last year, said analysts at Deutsche Bank.

That would hit the finances of the Irish government, which has already pumped about €63bn into its banking sector in the last three years.

“A new, even modest, increase in [banks’] capital requirements could deter sovereign investor participation and tip the balance in favour of the sovereign requiring a second loan program,” said the Deutsche team.

Ireland has been viewed as an example of how a country can stick to an austerity programme of tax rises and spending cuts. Fears that it will none the less need another rescue reinforce the challenges around a resolution of the eurozone debt crisis.

Alan McQuaid, chief economist at Dublin broker Bloxham, said Ireland will want to return to the bond markets when its current bailout loans end next year, but can only do so if yields, or interest rates, come down from their current level of over 7pc on its 10-year government debt.

That's not very good news for the so far best case austerity project.  The Irish people got screwed when the government bailed out their oh so insolvent banks.