Ireland

The International Monetary Fund (IMF), a part paymaster in the €67.5bn in bailout loans to Ireland, has recommended the "bold" restructuring of household debt including mortgage writedowns in a bid to prevent prolonged recessions, The Independent reported. Such moves could help avert cycles of household defaults, further house price declines and additional contractions in output, according to the IMF’s bi-annual assessment of the global economy. It cited the examples of Iceland and the US where this policy has worked in the past.

The National Asset Management Agency approved 113 of 114 applications for rental reductions sought by tenants of Nama debtors last year, Minister for Finance Michael Noonan has confirmed, the Irish Times reported. Last December, Nama issued a guidance note on upward-only commercial leases, following Mr Noonan’s announcement that the Government had abandoned plans to scrap upward-only rent reviews.

European Central Bank president Mario Draghi maintained a cautious public stance yesterday on the Government’s effort to restructure some of its banking debt, saying the State must meet standing contracts and commitments, the Irish Times reported. While senior euro zone sources say technical work is ongoing on a deal to revise Anglo Irish Bank’s promissory note scheme, Mr Draghi declined two opportunities to say whether he supported Dublin’s campaign.

The banking industry has urged the Government to limit the mortgage debt eligible to be written off in out-of-court debt settlements at €1 million, fearing that the proposed €3 million limit would include too much property investment debt, the Irish Times reported. The group representing mortgage lenders has lobbied Governments officials to reduce the debt cap to €1 million for individuals applying for personal insolvency arrangements to prevent too many buy-to-let mortgages and property investors being included.

Eircom has applied for court protection to allow it to restructure its debt load, the Irish Times reported. A representative of the company told the High Court the firm was applying for examinership, a process that protects company assets from creditors for up to 100 days while a survival plan is worked on to keep the business afloat. The examinership is the largest in Irish corporate history. Under the proposals, Eircom’s gross debts would be reduced from about €4 billion currently to about €2.35 billion.

The Irish Bank Resolution Corporation (IBRC), which is winding down Anglo Irish Bank and Irish Nationwide, has said it is in talks that could lead to it taking on residential mortgages from other banks, the Irish Times reported. Confirming for the first time that IBRC may take on non-core assets from other lenders, the bank said the talks were centred on repairing the financial system to allow banks to lend again.

State-controlled Irish Life and Permanent was ordered by the High Court to sell Irish Life to the State for €1.3 billion, which will be used to complete the recapitalisation of Permanent TSB as directed under the EU-International Monetary Fund programme, the Irish Times reported. The court ordered the sale on an application from the Minister for Finance to finalise the €4 billion recapitalisation of Permanent TSB before the separation of the banking and life businesses.

Loan transfers covering €130 million in property assets of Seán Quinn’s family were backdated in an attempt to put them beyond the reach of the former Anglo Irish Bank, the High Court in Belfast heard yesterday, the Irish Times reported. A judge was told overwhelming and undisputed evidence existed that the assignment over the Kutuzoff Tower in Moscow could not have taken place before July 2011 – by which stage the bankrupt ex- billionaire had lost control of his empire.

Central Bank governor Patrick Honohan warned today the payments on the Anglo Irish Bank and Irish Nationwide promissory notes have become "a source of risk to financial stability" to Ireland, the Irish Times reported. Mr Honohan told the Oireachtas Joint Committee on Finance, Public Expenditure and Reform a deal on the next €3.06 billion payment on March 31st was likely to be successful. He said the Central Bank has been "working vigorously" with the European Central Bank and other parties to come up with a mechanism to reduce the annual cost of the notes ahead the next payment.

The Irish government Tuesday said a referendum on the European Union's new fiscal treaty will be held on May 31, formally starting a campaign to persuade voters to back the compact or risk exclusion from access to future bailout funds, The Wall Street Journal reported. Ireland is in the second year of an austerity program linked to €67.5 billion ($90.17 billion) of loans from the EU and the International Monetary Fund.