Ireland Seeks To Extend European Commission Bank Guarantees As Top Banks See €25 Billion In Maturities This Month

Even as the melt up continues with the US economy double dipping, things in Europe are just getting plain worse by the day. First it was the disappointing series of PMI data out of the old continents, with a focus on the periphery, where pretty much every number missed expectations. Now Reuters is reporting that due to refinancing requirements to the tune of €25 billion by its two most insolvent banks Anglo Irish and Allied Irish, the banks, and the government of Ireland itself, has quietly request an extension of the European Commission bank guarantee program which bailed out the country back in 2008, and which is needed to bail it out all over again. "Ireland's guarantee, which is set to run out at the end of the year, saved its financial system from collapse when it was first issued in September 2008 and has continued to be a lifeline for lenders since the Greek crisis shut off their supply of term funding. Both Anglo Irish and Allied Irish Banks, the country's second-largest lender, have called for the guarantee to be extended and the government said it was in discussions with Brussels about its future." In other words, nothing continues to work in the European banking world, except that which is explicitly backed by the ECB, which in turn is implicitly backstopped by the Fed. If there was a reason for the melt up to surge another 3-4%, this is it.

More from Reuters:

"The government is united in its determination in relation to the resolution of the Anglo Irish Bank issue," it said in a statement.

"The government is working with the EU authorities to that end; it is also in active discussion with the EU commission about the future of the bank guarantee".

Analysts are expecting the guarantee will be extended as Irish banks face having to refinance around 25 billion euros in debt this month.

The central bank governor said last month that any extension of support should be in quarters rather than years.

Anglo Irish has to refinance 7.2 billion euros this month.

And the 25 billion it appears is merely a lower estimate:

On Wednesday, a junior minister cautioned that the 25 billion euros figure may rise if the state-run "bad bank" or National Asset Management Agency (NAMA) demanded a higher discount than the 65 percent cited by Aynsley.

Then again, with China and US already 100% behind government-directed central planning, why should Ireland, which also got downgraded recently, react any differently. In fact, as we recently suggested, Ireland should riot and strike, in order to get the same cost of capital that the Greeks achieved so easily 4 months ago, with a little Molotov cocktail-facilitated theatrics. And furthermore what is 25 billion any way? The US Treasury auctions off that much on any given Tuesday.