Euro under pressure after Cowen allegedly hints at IMF help being needed

[seabhac siulach]

The Euro came under pressure today as it appears Taoiseach Cowen, while in Japan, may have been less than discreet in talking about possible IMF help in the future:

Euro stabilises after Ireland denies IMF reference | Currencies | Reuters

"The Irish Embassy in Tokyo, where Cowen is visiting, denied earlier reports that he said he may call in the IMF if the economic situation deteriorates"

"Even with the denial, I think the markets are likely to conclude that there's no smoke without fire," said Derek Halpenny, European head of global currency sresearch at BTM UFJ in London.

"It's a well known fact that of any country within the euro zone that Ireland has the most fragile banking sector because of the degree of leverage in the property market."

If this is true, if Cowen has said what he is alleged to have said, then it is imperative that the Dail be recalled immediately, and that he should return from Japan to be properly questioned on what was said. This needs to be cleared up immediately. Such talk of the IMF being called in should not be allowed to continue, with all the damage such rumours can do to Irish business confidence and overseas investor confidence.
If Cowen actually believes the IMF may need to be called in, that the economy is in such dire straits, then his first duty is to communicate this directly to the Irish people...not break it to them secondhand while over in Japan (of all places...).

[seabhcan]

wow, I never knew Ireland had such power.

Cowen should continue to spread stories and denials until the euro drops to around $1.20 and £0.80. Would be great for exporters.

[mccafferty cat]

Cowen.......what a bumbling moron. He has just shredded FF's economic competence for the next 20 years.

How often has the IMF thing been thrown at Garret Fitzgerald over the years?

[seabhcan]

"It's a well known fact that of any country within the euro zone that Ireland has the most fragile banking sector because of the degree of leverage in the property market."

Spain also has had a major housing market collapse - how come their banks are fine?

[QuizMaster]

He mustn't be doing it properly. The euro has gained 2p in the last few days.

[Pauli]

He mustn't be doing it properly. The euro has gained 2p in the last few days.

But the trend is down QuizMaster, as I said it would be.

[seabhcan]

But the trend is down QuizMaster, as I said it would be.

I don't understand why - but good. And none too soon.

Id bet the Germans would love to see Cowen talk the euro down.

[Clanrickard]

Spain also has had a major housing market collapse - how come their banks are fine?

They are not fine but they have significant overseas assets I believe and are not up to their necks the way ours are. Also it will be easier sell houses on the Costa Del Sol rather than the bog holes that have seen "divilipments" dumped on them in this country

[seabhac siulach]

Spain also has had a major housing market collapse - how come their banks are fine?

Easy...their minister of finance and Central Bank boss ensured that Spanish banks put enough money aside during the good times, in a counter-cyclical policy, to cover any possible downturn in the housing market, bad debts, etc.

Property: the Spanish are coming - Property, House & Home - The Independent

"The Bank of Spain has also helped out by requiring the banks to make old-fashioned general provisions – supposedly outlawed under IFRS accounting – so that they have been building up reserves against future bad debts instead of waiting for loans to turn sour. The central bank also deterred its banks from running structured investment vehicles and other such exotic funds by saying that they would have to capitalise them on their balance sheets."

If only our own Central Bank/Financial regulator had been so competent...

[revereie]

He has just shredded FF's economic competence for the next 20 years.

So we have economic competence - thank you very much!

Spain's banks are doing better than most internationally as they weren't that exposed to NA relatively speaking although if the recession bites LatAm &SA, then they'll also take a hit.