Ireland Departs From Its Bailout Program
Ireland has officially exited its eurozone bailout program as of today, Reuters reports. In a landmark moment for the European Union, the first of the countries bailout out during the financial crises has made the choice to leave its bailout program. Ireland has officially exited its bailout package, marking its return to financial independence in a move hailed as a victory for the Irish and for other European officials alike.
Ireland got into trouble several years ago when its banking sector collapsed in the midst of a housing bubble. Banks were left with gaping holes in their balance sheets, and they faced a serious risk of insolvency if funds were not made available. With borrowing costs rising rapidly for the government, the country made its choice to accept an 85 billion euro bailout package in order to save its financial system. Now, Ireland is ready to emerge from that bailout and put its government and its banks back on the market.
For the government, at least, the cost of borrowing is well below the outrageous 15 percent levels seen during the height of the crisis. Currently, the government is able to borrow at 3.5 percent, reflecting a high level of confidence in the country’s ability to repay its loans. Having access to capital markets at reasonable interest rates is key to Ireland’s exit, as it seeks to return to a more normalized system of issuing bonds on the open market.