Fianna Fáil Spokesperson on Finance, Michael McGrath TD, says the latest comments from a German spokesperson that Germany will continue to “co-operate closely” with the Irish Government to ensure a successful outcome to the Irish Programme of Assistance do nothing to clarify the situation arising from Chancellor Merkel’s comments yesterday. 

Deputy McGrath commented: “The comments we heard this morning from the German spokesperson do not address the key issue of whether legacy bank debt will be dealt with through the ESM. In fact, sources close to the Chancellor told RTÉ last evening that Angela Merkel’s post-summit comments that there would be no direct recapitalisation for legacy bank debt were ‘clear’. 

“The Germans have not cleared up this issue at all and what we are left with is the hard line statement from the Dutch, Finnish and German Finance Ministers in September and the comments of Chancellor Merkel last night that legacy bank debt will not be addressed by the ESM. 

 

“When considered together, these statements represent a major setback for Ireland in our hope of achieving a deal on back-dated recapitalisation of banks. The Irish Government seems to be in denial about the significance of Chancellor Merkel’s comments. 

“I am again calling on the Taoiseach to have a direct bilateral meeting with the German Chancellor to get a definitive answer as to what the position is regarding a deal on legacy bank debt for Ireland.

“Since the summit statement at the end of last June, the Government seemed to take it for a granted that a deal on bank debt would follow. The Government now needs to quickly realise the writing has been on the wall for some time that a deal on bank debt, while still possible, is by no means inevitable.”