Ireland's Prime Minister acknowledged Tuesday that the country has been all but shut out from further borrowing on world bond markets as European leaders continued crisis talks over a possible rescue for the heavily indebted nation.
"The cost of money is simply too high. We have to find further initiatives," Irish Prime Minister Brian Cowen told the Parliament in Dublin, opening the door for the first time on a possible international bailout.
"The issue now is whether Ireland will pull the trigger; will they ask for aid. They can't be helped without that request," said one official, who would not speak for the record because of the sensitive nature of the negotiations.
As I pointed out in an earlier post, EU troubles are now very localized as LIBOR has stayed firm during this most recent episode. Ireland will have to accept funds (needed or not) in order to help stabilize the makets and lead the way for Portugal to tap should they need to. If Ireland takes money for the banks, and can shore up their capital, it will go a long way to reducing the spread on sovereign debt.
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