Fianna Fáil TD Billy Kelleher has called on Minister Michael Noonan to provide clarity on his previous claim that “no threatening language” was used by the ECB in 2011 in its engagement with Ireland concerning the possible imposition of losses on senior bondholders.
The Banking Inquiry reported that the In March 2011, ECB chief Jean-Claude Trichet told Minister for Finance Michael Noonan that “a bomb would go off in Dublin” if burden-sharing took place. The Inquiry concluded that had Mr Noonan proceeded with his previous intention to impose burden-sharing, €9.1bn could have been saved based on NTMA estimates prepared at the time.
Deputy Kelleher commented, “The revelation that the NTMA had, prepared an assessment in March 2011 of the potential saving for Ireland from imposition of losses on senior bondholders is very significant. According to the NTMA, market investors were assuming that significant losses were going to be imposed. They were of this belief because Fine Gael had campaigned on this policy in the General Election.
“Minister Noonan has to date, given a less than frank account of his discussions with the ECB. There is now clear evidence that the ECB explicitly threatened Ireland with dire financial consequences if the Fine Gael / Labour government proceeded with a course of actions for which it had a democratic mandate and one which was expected by investors. Minister Noonan’s current strategy, simply staying silent on the issue, is not sustainable.
“The consequences for Ireland of not taking this course were very significant. The Minister for Finance should give a full explanation of all the circumstances which led up to this decision to spare senior bondholders. Up to now he has sought to give the impression that it was a decision taken in conjunction with the ECB. In reality it now appears that it was very much one which was imposed on us. This has very profound implications for both Ireland’s ongoing relationship with the EU and also the ECB standing in general. The Irish public are owed a full explanation and this should be provided as soon as possible,” concluded Deputy Kelleher.