With the IMF, you typically think emerging economies, not an EU nation like Ireland. But Ireland may be forced to go begging if economic conditions worsen
Reuters: The euro slid more than a cent against the dollar on Wednesday, with traders citing a report that Ireland’s Prime Minister said IMF help may be needed if its economic downturn worsens.
The Irish/German 10-year government bond spread widened slightly to over 175 basis points. Traders cited a report on Bloomberg, quoting Irish news channel RTE.
For a long time there, Ireland was the dynamic, growing envy of the rest of Europe. Now its finances may be the weakest.
Brian Cowen, the Irish official who made the comments, sought to clarify that he was only talking about the worst-case scenario if the country didn’t get its fiscal house in order. Kind of like when Schwarzenegger warns California could go bust if they don’t make a dramatic fix.
RTE: ‘I have never said that,’ Brian Cowen told reporters in Tokyo. ‘We are a member of the euro area and we have the best-performing economy in the last 10 years in the European Union.’
A spokesperson said that in the briefings with social partners, Mr Cowen set out what the fiscal position would be if no corrective action was taken.