International reaction to the bank rescue plan
FINANCIAL TIMES
Call the fat lady: Ireland’s banking horror show must end now. Its four surviving banks will require €24 billion of new capital after Thursday’s stress test results. That brings the amount of public money poured down the drain since they were felled by the global financial crisis of 2008 to €70 billion – 45 per cent of gross domestic product.
THE TELEGRAPH
Mr Honohan said the latest tests were designed to draw a line under the banks’ problems and help them return to normality. However, investors remain sceptical that even these harsher tests and new capital raisings will bring an end to Ireland’s problems.
DIE WELT
It is becoming ever clearer that debt restructuring is unavoidable for Ireland, Greece and perhaps Portugal. Such a step would mean the creditors sharing in the immense cost. Politicians cannot continue to favour through rescue packages those who reaped good returns over years and are now bailed out at the taxpayer’s expense.
LE MONDE
Ireland’s bill for bailing out the banks has climbed to over €70 billion, equivalent to half the annual wealth of the country.
WALL STREET JOURNAL
Ireland is on track to nationalise its banking sector after its Government uncovered a €24 billion capital shortfall in the latest round of “stress tests” of top banks. That gap will be plugged largely by taxpayers.
WASHINGTON POST
Portugal on Thursday disclosed new and larger budget deficits for last year, and Ireland said its banks need tens of billions of dollars in additional capital. The fresh round of bad news is likely to further shake confidence in Europe’s ability to resolve its lingering financial problems anytime soon.
NEW YORK TIMES
A higher-than-expected budget deficit in Portugal and the need for more money to rescue Ireland’s failing banks have renewed fears that Europe’s debt crisis is worsening despite its sizable bailout fund.
SYDNEY MORNING HERALD
Irish banks have become highly dependent on short-term loans from the ECB, but the country’s credit rating has been hit over the bailout and continued concerns over the extent of the banking sector’s problems.
