Brian Cowen as quoted by Irish Times –
“So the sovereign, if you like, has that funding arrangement in place. We don’t have to borrow any money in respect of the sovereign issues that affect the Government . . .’’
From the FAQs for the European Financial Stability Facility –
A16 – Will the EFSF bail out banks?
The EFSF provides loans to countries in financial difficulties. But it could be agreed with a Member State that receives funds to use them partially for financial support to banks in accordance with the agreed country programme.
It’s possible to read too much into an off-the-cuff statement from Brian Cowen. But his apparent fixation with ruling out a need for the sovereign to borrow doesn’t preclude him saying that he never excluded the possibility of borrowing to “finance” the bank bondholder bailouts.