Ireland - Euro-zone solidarity bonds

Tue, Feb 24, 2009

Media speculation suggests that Ireland could be offered euro-zone 'solidarity' bonds with austerity measures attached as an alternative to any future International Monetary Fund (IMF) bailout.

Euro-zone countries are exchanging ideas about how best to cushion individual members, in the interest of single-currency stability, if they face financial collapse but without dulling national austerity efforts.

One idea floated in Berlin involves a 'bilateral bond' that would allow countries to borrow money at rates enjoyed by Germany when it issues government bonds, without having to pay the current risk premium on top.

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