Growing Indications Govt has Conceded Defeat on EU Bank Debt Deal – McGrath

Fianna Fáil Finance Spokesperson Michael McGrath TD has said there are growing indications the Government has effectively conceded defeat on securing a deal on bank debt from Europe and is now trying to deflect attention from this defeat by changing the goalposts.

Deputy McGrath stated: “The noises coming from Government in recent days have led me to the conclusion that they have all but conceded defeat on the prospects of securing a deal in Europe on our bank debt. Minister Noonan seems to be of the view that the deal he has been pursuing for some time at EU level may not now be the best option. This is a dramatic U-turn on the part of the Government. We have even had Government ‘sources’ speculating that a deal on the early repayment of the IMF loans would be a good substitute for a deal on the bank debt.

“All of this is part of a clear attempt by Government to play down the prospects of a deal on bank debt which was promised over two years ago. It is not acceptable that the Government has all but given up on securing the implementation of the June 2012 EU Summit agreement. That Summit agreement was interpreted by the Government as ‘a game changer’ which would deliver a bank debt deal for Ireland. No such deal has been secured.

“The early repayment of the IMF loans is fully supported by Fianna Fáil but it is entirely separate to, and certainly not a substitute for, a deal in legacy bank debt. Having failed to deliver a deal on bank debt, the Government is suggesting the sale of AIB shares as a better alternative. This is completely contrary to what the Government has been saying all along when a bank debt deal was the main objective.

“The Government needs to adopt a twin strategy of building support among our EU partners for the early repayment of our IMF loans while at the same time preparing an application to the ESM for a deal on retroactive recapitalisation in November. Instead, the Government is busy spinning and hoping the people will forget the promise two years ago of a multi-billion euro deal on bank debt.”