The Irish Times reports today that Germany (by the likes of FM Schauble) said it will oppose any Irish debt-relief proposal. When the Spanish bank bailout deal was reached in June, European leaders stated that “similar cases will be treated equally”. In this respect, Ireland hoped to renegotiate its €64B bank bailout in October. The prospect led to a further decline in Irish yields (9-yr yield fell 6% this week) and Irish spreads.
Despite the German opposition, Irish government officials will begin a tour of European capitals next week to discuss technical details of debt relief. These negative comments (and other potential road blocks towards a deal) can have a negative impact on Irish bonds.