Thursday, November 28, 2013

28/11/2013: To OMT or not to OMT?



Per Irish Times report (http://www.irishtimes.com/news/politics/ecb-warns-bailout-exit-limits-ireland-s-options-1.1608426) "In remarks to The Irish Times, ECB executive board member Jörg Asmussen said leaving the bailout without a credit line meant Dublin did not meet conditions for the bank to buy Irish debt under its bond-buying programme." He is referencing OMT programme.

We knew that. Despite the fact that just a week ago, Minister Noonan claimed that "leaving the bailout without a precautionary credit line neither rules Ireland in nor out of accessing the ECB's Outright Monetary Transactions (OMT) programme. It has been speculated that going it alone without the safety net of a credit line would ban Ireland from the ECB scheme. "There is a misunderstanding in Ireland, even at the highest level of economic thinking, about OMT," Mr Noonan told TDs yesterday." (http://www.independent.ie/business/irish/we-can-still-access-ecb-aid-noonan-29771886.html)

Ouch...

Note: I wrote about this problem two weeks ago: http://trueeconomics.blogspot.ie/2013/11/15112013-exiting-bailout-alone-goods.html. I was clearly 'misguided'...
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