Ireland Just Elected The Party That Wants To Trash Bondholders, Exit Polls Show

fine gael

Photo: ap

Exit polls from Ireland’s big election show the ruling party Fiana Fail is definitely out.Fine Gael is set to win without a majority. The most likely outcome is a coalition between Fine Gael and labour, according to

Both Fine Gael and labour campaigned under promises to renegotiate debt with a haircut for bondholders.

However, that doesn’t mean a haircut will happen. Morgan Stanley’s Elga Bartsch said in a note Thursday:

Haircuts on senior bank debt still unlikely
In their election manifestos, Fine Gael and Labour state that they would aim to force bond-holders to share the costs of recapitalizing troubled financial institutions. However, we believe that unilateral action against senior unsecured bank debt is unlikely given the strong resistance from the European Commission and the ECB. Instead, we think the spectre of haircutting senior bank debt will likely be used to secure additional assistance in supporting the Irish banking system.

The yield on Irish 10-year bonds ended Thursday within five basis point of record highs.

Don’t miss: How Ireland Became The Biggest Basket Case In Europe

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at

Tagged In

ireland moneygame-us