ECB concerns on prom note deal entirely separate to plan on early repayment of IMF loans – McGrath

Fianna Fáil Finance Spokesperson Michael McGrath TD has said that any concerns the European Central Bank (ECB) has regarding the 2013 promissory note deal have nothing to do with Ireland’s proposal to repay IMF loans early and save the State up to €400m per annum in interest repayments.

Deputy McGrath stated, “Fianna Fáil strongly supports the efforts by Finance Minister Michael Noonan to build support in Europe this week for the proposal to repay IMF loans early and thereby avail of much cheaper borrowing on the international markets. We raised this issue with the Minister in the Dáil as far back as last January and Fianna Fáil received a firm statement of support for the plan from the IMF earlier this summer.

“The early indications of support for the plan from the European Commission are to be welcomed and now need to be built on. Any concerns ECB President Mario Draghi has regarding the arrangement that replaced the promissory notes are in no way relevant to the proposal to repay IMF loans early. The ECB is not a party to the EFSF and EFSM loans extended to Ireland under the bailout programme and therefore its consent it not required for the deal on early repayment of IMF loans to proceed.

“If Mario Draghi – whose leadership of the ECB has been immensely positive for Ireland – has ongoing concerns about the holding by the Central Bank of Ireland of the government bonds that replaced the promissory notes, he needs to take up the issue directly with the Governor of the Central Bank, Patrick Honohan. Forcing Ireland into an early sale of these bonds would result in a significant annual loss to the Exchequer, potentially offsetting the potential benefit from a deal on the IMF loans.

“The possibility of achieving a recurring saving of about €400m per annum for Irish citizens must not be allowed to be in any way damaged by the ECB. The reality is that the window of opportunity that exists to secure the saving for the State will not remain indefinitely. With the international markets in benign mood and capital repayments to the IMF due to commence next year, now is the time to put these deal in place and objections from the ECB that could result in delays should not be entertained.”