Monday, 28 February 2011

Talking tough with Europe - the markets watch

As predicted and expected, it looks like a Fine Gael/Labour coalition government is in prospect for Ireland. While the two parties need to talk turkey before consummating their marriage, their is at least one policy area where we can already surmise the certain direction of the new government.

Debt restructure/negotiation. That means, reconsidering the position of creditors of those limited liability entities formerly known as Irish Banks. as well as some form of renegotiation of funding terms from the EU.

As has been commented on already be knowledgeable commentators, the only outcome of use to Ireland will be one that significantly reduces or curtails the prospective national debt burden, which is already at a level that arguably is not manageable.

So, is there likely to be any success on this score from FG/Lab? Monday morning gave us an early glimpse of the view of financial markets who are looking at nothing else:

So the early running on that question appears to be "no".