Fianna Fáil Spokesperson on Public Expenditure Michael McGrath TD has given his reaction to the announcement by Minister Michael Noonan that he would like to force a ‘haircut’ on unguaranteed senior bondholders in Anglo Irish Bank and Irish Nationwide.

He commented, “This announcement enjoyed significant coverage last night and this morning, but the more we learn about it the more puzzled we become.  As reports emerge that the support of neither the ECB nor the European Commission was not sought before this announcement, the suspicion grows that this was more about getting good headlines on the Government’s 100th day than making any real progress on the issue, which will be a massive disappointment to many people.

“The truth is that on closer reading, there is nothing new in what the Minister said.  The IMF is on the record already as supporting losses for certain bondholders, so coming out of a meeting in Washington and declaring it as a huge victory makes no sense except if it was driven by PR needs.  Again, we appear to see this Government putting spin ahead of substance.

“The more significant story coming out of Washington is the fact Michael Noonan wouldn’t even raise the topic of bondholders with Mr Geitner, the man who is reported to have vetoed action on them in the past. The Minister raised cutting the interest rate which has got nothing to do with the USA, but wouldn’t raise burning the bondholders which the USA is alleged to have vetoed six months ago.

“Action on these bondholders would be very welcome and would be facilitated by the steps taken by the last Government.  But it will only take place with the support of the ECB.  They are unlikely to be influenced by the headlines which this statement was intended to generate.  I sincerely hope that the Minister has not made matters worse.”