EU provisionally approves up to €5.35b Bank of Ireland

The European Commission said Monday it has provisionally approved up to EUR5.35 billion in rescue aid for the recapitalization of Bank of Ireland PLC (IRE). ""This follows from the calculations of the Irish central bank, in March this year, of the capital needed to deleverage and meet higher than normal loan-to-deposit ratios to be able to resist stress situations,"" the commission said in a statement. ""The commission agrees that the measures are necessary to increase the bank's solvency ratios and maintain confidence in the Irish financial markets,"" it said in a statement. The Irish government will underwrite the issue of new rights by Bank of Ireland for up to EUR4.35 billion, while another EUR1 billion will be provided as contingent capital, the commission said. Polish central bank sees inflation below target in 2013 Poland’s economic growth will slow the next two years, pushing the inflation rate below the central bank’s 2.5 percent target in 2013, the Narodowy Bank Polski said. Gross domestic product will slow to 2.9 percent in 2013, the central bank projected in its July Inflation Report, down from its 3.1 percent forecast in March. Inflation will slow to 2.4 percent in 2013, compared with a previous forecast of 2.9 percent, according to the report. Price growth this year will be 4 percent, above the previous projection of 3.2 percent and data received after May 25 indicate the “increased possibility that inflation in the near-term horizon will be above the projection,” the bank said in the report. Europe needs options to cut Greek debt-service costs, Sweden’s Borg says The European Union needs to look for ways of reducing Greece’s debt servicing costs, Swedish Finance Minister Anders Borg said, suggesting a shift in focus as the bloc begins considering additional aid for the country. More than a year after the EU and the International Monetary Fund extended Greece 110 billion euros ($157 billion) in aid, they’re considering options for additional support as the country’s borrowing costs and indebtedness continue to grow. The yield on two-year Greek notes rose to a euro-era record of more than 30 percent last week. The nation’s debt burden will rise to 158 percent of GDP this year from 143 percent in 2010, according to EU forecasts.