Saturday, November 16, 2013

Germany Steps Up to Work With Ireland

We've talked about the idea of Germany working within the EU, not as the lender of last resort, but as an experienced strategic lender, investor and partner.  Now it appears that Germany is doing just this with Ireland, to the benefit of both parties.  In Ireland's case, they get access to credit without all the intrusive and unnecessary political regulatory baggage associated with EU, ECB, and other facilities.  

"Mr. Kenny said that his government will "work more closely" with German ChancellorAngela Merkel to sustain Ireland's recovery, saying that Germany's development bank KFW had been asked to help provide credit to Ireland's enterprises."  Source: MarketWatch. 

Ireland is not out of the woods by any means, but their ability to stick with their programs and come to an exit from their bailout has been hailed as exemplary, even by the IMF!  

The Irish government did have the ability to exit the bailout with a standby international and EU credit facility, but they again made reference to the additional terms which were not consistent with the Irish government's view of economic sovereignty.  

This announcement was, to our ears, the one tiny, but potentially path breaking news in a long period of EU crisis. 

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