That stock News

The new seat provided Bank Irish Anglo remains unfinished in Dublin North Wall Quay: MCNAUGHTON CATHAL

The formal sector, Ireland ECB representatives towards the EU and the IMF frantically working together to rescue funding package.

The other tracks, that of the private sector is dominated by nerve applicants become increasingly concerned about the safety of money they have in the Irish banks.

Isn't surprise, eyes on this race from inside and outside of the Ireland. Its outcome is essential for the country, for the stability of the other European economies and for stock assessments, bonds, currencies and markets around the world.

After flagging at the beginning of last week in the middle of the contradictory signals and contradictory statements, the official sector has been gaining solide.Il registered weekend ahead by just a few steps. and it seeks to increase the positive momentum by accepting quickly a package which will probably include three main components: more Irish; budgetary austerity large budgetary loans in Dublin in Brussels (EU) and Washington (IMF); liquidity and capital support for Irish banks almost everyone, including the ECB in Frankfurt.

Accompanied by such a package, the formal sector has the capacity to maintain its lead for the next days and semaines.Et she need to do if the Ireland is to shoot an exodus of bank deposit which, if left unattended, could become a bank full implementation would devastate Irish jobs, potential growth and long-term prosperity.

Unfortunately, the formal sector lead is automatically translated into a decisive victory.There are two significant obstacles to overcome. Is short term and, fortunately, more favourable .the minimization ' is more long term and requires a fundamental change in mentality and approach.

It is likely that, during the next few days and weeks, one or more members of the official team could stumble and undermine the commonality of approach and a goal which is so essential to the maintenance of the head.

Irish politicians could resist the erosion of de facto national sovereignty on economic decisionscitizens could push against yet another series of cuts and spending tax increases; the ECB and IMF could resist a weakening further their balance sheets.and the European Union may find it difficult to persuade all Member countries to plant to finance the Irish bailout.

While each of these attracted much attention, there is a second challenge much larger (and longer term).The formal sector pursues a strategy that is appropriate for a sprint, while the Ireland is engaged in a difficult marathon and complex.

Beyond the next few days and weeks, the Ireland and official partners must convert approach of liquidity in the short term in a more sustainable long-term solution which deals with credit growth and restructuring économique.Quatre conditions must be met for this:

Firstly, Ireland must find more decisively to restructure its berges.Mesures simply to kick the can, on the road not reassure depositors nervous and frivolous.

Secondly, you cannot resolve a solvency problem involving new old debt debt.The Irish Government must move with more strength to overcome debt overhang that discourage new investment and erodes the future productivity of economy list.it process, it can and must, a better balance in the sharing of the burden between taxpayers and the creditors, preventive and orderly manner.

Thirdly, the Union European must provide more and more concessional financing long-term Irlande.Il must take this opportunity to adapt rapidly the new European Financial Stability facility has designed six months ago, but still has not been made opérationnel.enfin, should be a debate as to whether if countries such as the Ireland and the Greece can regain competitiveness in the years of socially painful income, wage and salary compression.

Yes, each of these four areas is difficult, controversial and politically sensitive.

They involve a risques.Encore avoiding does not remove them the difficult challenges facing the Ireland and other devices country européens.Il will just the worst thing in a few months.

Marathons are inherently difficult and complexes.tente refuse this truism treating them as sprints fool not long.

 Mohamed a. El-Erian is Chief Executive and investment co-chief of PIMCO and is the author of the bestseller 2008 clash of article marchés.Cet agent contains the current opinions of the author but not necessarily those of PIMCO

View the original article here