When the prime minister of Iceland is giving your government tutorials on fiscal discipline, you know you're in trouble.
The speech by Iceland's Geir Haarde was reported with relish at home, but broadly ignored overseas.

The speech to the Institute of European Affairs was reported in peculiar ways by some domestic newspapers, one of whom said the Irish economy is forecast to shrink this year by an eye-watering 10.75%.

That would be eye-watering if it was actually true, the real figure being 7.7% of course (budget speech, April 2009).

But that is splitting fiscal hairs, the problems are huge and potentially getting worse, based on commentary from the IMF last week. But Ireland's bond spreads are relatively stable, albeit at elevated levels. But generally the yield on Irish 10-year paper is broadly trading between 5.4% and 5.6%, despite all the noise off stage. Ireland may escape a funding crisis, but instead may have an unemployment crisis.

Of course, the funding position could change, but coverage in the international media is having less impact on events than ever before. The discount on loans moved into Nama is now the missing part of the jigsaw foreign lenders are waiting for. JP Morgan said last week in a note on the Irish banks it was waiting to see the size of the discount on these loans before making a firm recommendation on AIB or Bank of Ireland.

That same approach is being taken by foreign lenders. They are not getting distracted by debates over Lisbon or ministers' pensions.

Emmet Oliver