Ireland Can Weather Greek ‘Storm,’ Corrigan Says
Ireland can “easily” weather the impact of the Greek crisis on financial markets, which has sent Irish bond yields soaring, the head of the country’s debt agency said.
“The movement in Irish bonds clearly has been a little bit disappointing, but it’s part of the general movement caused by the Greek problems,” John Corrigan, chief executive officer of the National Treasury Management Agency, said today in a Bloomberg Television interview in London. “I wouldn’t be unduly worried about it.”
Irish, Portuguese, Spanish bond yields jumped in the past week as investors questioned the countries’ ability to reduce budget deficits and avoid the fate of Greece, which last week triggered an aid package from European governments and the International Monetary Fund. Irish two-year bonds fell for an eighth day today, pushing yields to the highest in a year, according to Bloomberg generic prices.
Ireland has “very substantial” cash balances and could “weather the storm” if there was more turbulence, Corrigan said. The agency has the scope to vary the amount of bonds offered in monthly auctions, he said.
“At this point of time, we have a total borrowing of about 20 billion euros ($26.7 billion) for this year,” he said. “We’re very comfortably circumstanced.”
Irish 10-year bonds also fell today. The premium investors charge to hold the country’s 10-year debt over the German bund, Europe’s benchmark government bond, widened 19 basis points to 206 basis points as of 2:42 p.m. in London, the highest since July. It has widened 72 basis points in the last two weeks.
Portugal’s spread over Germany widened to 264 basis points today, while Greece was at 663 basis points.
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