Irish Central Bank Governor Patrick Honohan said market confidence in the country is “seeping back” after being knocked since the 2008 banking guarantee and its aftermath.
“Fiscal and competitiveness adjustment is certainly happening, ‘’ Honohan said in an e-mailed copy of a speech in Dublin. ‘‘The economic contraction has been arrested, though a sustained and vigorous upturn remains some time away.’’
Honohan said ‘‘close attention’’ is being paid to optimizing banking debt policy. Ireland’s bailout partners are working on a paper on a possible refinancing of about 31 billion euros of promissory notes the state used to bail out the former Anglo Irish Bank Corp.
Honohan said the Irish have ‘‘not done too badly’’ in balancing the need for action and keeping options open as the situation has been consistently ‘‘at the unfavorable end of the range of possibilities.’’ He said they should ‘‘proceed carefully with a view to maintaining as much freedom of action’’ to take advantage of opportunities that may arise.