European leaders, the ECB, the Commission, the heads of States had proclaimed it loud and clear : The Greek debt restructuration will remain an exception, the first and only of its kind; no other country shall benefit from such largesse. Their goal was to avoid contagion, because if every country experiencing difficulties were to ask for a debt restructuration (which entails a net loss for investors), the whole trust in the Eurozone would stand on shaky grounds.

Nevertheless, away from the cameras, without invoking a « last chance summit », another country just benefited from a restructuration, namely Ireland. Wondering why the mainstream media kept quiet about it ? Well, actually, that was the goal. True, things were made easier, because the ECB was the sole payer; no private investors, who would have been more vocal, were involved.

Ireland has benefited from  85 billion euros for the bailout of its banks in 2009. But, last December, the governor of Ireland’s central bank had clearly let it be known that it could not meet requirements. He said, in an « all-or-nothing » tone, ‘The reimbursement time span should be considerably expanded’.

So the European central bank (ECB) was stuck with accepting (on Feb. 7) an extension of the mean terms (from 7 to 34 years) and a lowering of the interest rates. Thus, the ECB is forfeiting 20 billion euros in interest rates over ten years... which is quite a gift, considering that, with Greece, it had forfeited 8 billion euros in interest rates. The first payment on the principal will be made in 2038, and the last one in 2053, which will leave ample time for more « discussions ». Well played, Dublin !

Since Ireland was planning to come back to the markets before the end of this year, it had to avoid any psycho-drama. Sure, the country has made some real efforts that are starting to pay off, exports are on the rise, the expected growth for 2013 is 1.3%, which is not so bad. But the real estate bubble crisis hasn’t been solved yet, and delinquent mortgages are parked with the Bad Bank NAMA (National Asset Management Agency), funded by the State. There are still risks.

We understand the need to keep this accord out of the public eye in order to keep investors focused on European sovereign debts. But Portugal is already knocking at the ECB’s door and asking why it could not benefit from the same arrangements that Greece and Ireland got. And Spain must be following with interest what its neighbor is doing... Well, it’s not such a scoop anymore !

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