Japan pledges to help with the Irish bailout
A man leaves the Bank of Ireland in Dublin. Ireland admitted Monday it is in contact with 'international colleagues' over its debt crisis but denied seeking a bailout.
TEXT OF INTERVIEW
STEVE CHIOTAKIS: It's a deepening debt crisis across the pond, as we know. First Greece. Then Ireland. Now the Japanese government has pledged about a billion dollars to help with an Irish bailout.
Marketplace's Europe Correspondent Stephen Beard is with us live from London with the latest. Hi Stephen.
STEPHEN BEARD: Hello Steve.
CHIOTAKIS: Is this a direct Japanese investment in Ireland?
BEARD: No. They're buying some of these so called bailout bonds. The money will go to Ireland as part of its bailout, but the bonds will be guaranteed by the whole of the European Union. So the money is pretty safe.
CHIOTAKIS: What's at stake for the Japanese?
BEARD: Quite a bit, I mean 10 percent of Japanese exports go to the EU, so Japan has an interest in trying to prevent turmoil in that market. Also, of course, if the euro zone were to break up, the euro would collapse and other stronger currencies, especially the Japanese yen would soar, and that would make Japanese exports more expensive and be bad for Japanese business.
CHIOTAKIS: Is this investment, Stephen, going to prevent the European debt crisis getting bigger, from spreading?
BEARD: Well, one analysts I've been talking to this morning says no. Steve Barrow of Standard Bank says Greece and Ireland have already fallen and had to be bailed out. Barrow things Portugal could be the next casualty.
STEVE BARROW: It does look as if Portugal for instance is the next domino to fall, and I don't think Japanese investment in the Euro zone will stop Portugal from requiring that bailout.
The Portuguese Prime Minister has just this morning denied again that Portugal does need bailing out. We'll find out whether that's true when his government tries to borrow more money on the markets tomorrow.
CHIOTAKIS: Stephen Beard, thanks you.
BEARD: OK Steve.
CHIOTAKIS: Marketplace's Stephen Beard, reporting from London this morning.