ECB Said to Be Ready for New Honohan Pitch on Anglo

The government and Honohan need to find a way to restructure the notes in a way that leaves the net impact on the money supply at zero. Otherwise Ireland's central bank could be accused of printing money, a policy opposed by the ECB.

A central bank commitment to hold Irish government bonds for 15 years "in this case would be for fiscal policy reasons, which makes it monetary financing, which is a no-no," said Lorcan Roche Kelly, chief Europe strategist at Trend Macrolytics LLC.

Here's The Best Explanation We've Seen About The Emergency, Late-Night Plan To Restructure Irish Bailout Debt

There's a debate in Ireland happening tonight designed to help reduce the massive debt burden the country is still facing since the collapse of the country's banks in the financial crisis... Lorcan Roche Kelly of Trend Macrolytics has emailed us a fantastic explainer of what's going on in Ireland. This is the clearest explanation we've seen yet, and we're very grateful for Lorcan's clarity on this. Be sure to follow him on Twitter @lorcanrk.

Success for Ireland in Bond Market

The government hopes that the 10-year issue and another long-term offering later this year will make it eligible for help from the ECB's still-untested program of bond purchases, known as Outright Monetary Transactions, which would in turn help push its borrowing costs lower. "If there is some clarification forthcoming from the ECB as to whether Ireland has reached the bar required to qualify for OMT, then Ireland should be home and hosed on exiting the bailout program this year," said Lorcan Roche Kelly, chief European strategist at research firm TrendMacro.

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