DUBLIN, KOMPAS.com - The financial authorities of the European Union officials will re trouble sleeping soundly. Recently debt crisis that originated from Greece to subside, now a new crisis re-emerged seedlings.
This time, the alarm signal comes from Ireland. In the last three weeks, the yield (yield) debt securities of government publications nicknamed "Celtic Tiger" that continues to climb.
Unmitigated, just three weeks, yields on government bonds have a tenor of 10 years jumped to 9 percent from the previous only 6 percent. "Increasing the excess of bond yields is very serious, and this to the attention of the entire European region," said Irish Finance Minister Brian Lenihan in Dublin on Thursday (11/11/2010).
Lenihan blames German official comment about the crisis in the rescue mechanisms of the European Union as one cause of surge in Ireland's yield.
Some German officials are proposing for investors holding government bonds join the European Union members bear the cost of rescue in case of crises in the future.
Indeed, newer rescue mechanism is still unclear. Germany also stated that the mechanism may not be applicable to debt securities that have been outstanding (existing) right now.
However, that statement had already blew concerns among bond investors. Well, who hit for the first time Ireland is the bond market. Investors continued to press the Irish Government bond prices that yield a high fly.
This may be because the current financial position of Ireland's most fragile when compared to countries other European Union countries. Later this year, the Irish Government's budget deficit will reach 32 percent of gross domestic product (GDP) to them. This deficit figure to be the highest in the European region.
In these circumstances, obviously, the Irish have the greatest risk of default (default). If the spike in the yield does not go down, then it is not impossible Ireland need an injection of funds from Europe as well as Greece.
The result of the latest poll of economists by Reuters shows that pessimistic about the prospects of Ireland. The proof, 20 economists and a total of 30 economists surveyed indicated that Ireland would not be able to get through the year 2011 if it did not obtain external funding.
Ireland remains optimistic
EU officials also continue to examine the condition of Ireland's fixed income market. EuropeanCommissionPresident Jose Manuel Barroso also said that the EU is ready to take action if Ireland needs help its partners in the European Union.
So far, the Government of Ireland is still quite optimistic. "We have the capacity to make our country survive and remain credible," said Lenihan.
However, concerns that had already spread. Banking stocks falling. For example, the price of Allied Irish Banks shares fell 6 percent and Bank of Ireland shares fell 7 percent, on Thursday (11/11/2010). The share price of Royal Bank of Scotland has a large exposure in Ireland are also adequate in a landslide.
Anxiety also has made the price of debt securities into instruments of credit default swaps (CDS) Portuguese and Spanish Government bonds also jumped to record highs.
Meanwhile, the difference between yields on 10-year bond issue of Irish and German bond issue (which is the benchmark) surged past 680 basis points and scored the highest record in a row in the nine sessions last transaction. (Cipta Wahyana / KONTAN)
Friday, November 12, 2010 10:01 pm
Source: KONTAN
Editor: Erland Djumena
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