The European Central Bank has expressed “serious concerns” about Ireland’s bailout package which includes provision for the Irish Finance Minister to intervene in the banking sector on repayment of debt.
The ECB is worried that may interfere with the emergency loans that it has made to Irish banks – specifically Dublin could usurp its rights over the collateral – that is shares – given as security by Irish banks.
Irish banks currently account for about a quarter of all the money the ECB has lent out.
The amount is so high because other banks refuse to lend to them.
In a seven-page opinion signed off by its president Jean-Claude Trichet, the ECB raised concerns that an Irish government draft law is “insufficiently legally certain” on a number of critical issues affecting the euro system.