The Minister for Finance Michael Noonan must press the President of the ECB Mario Draghi today on a timeline for a conclusion to be reached on the negotiations surrounding the debt associated with the recapitalisation of Anglo Irish Bank and Irish Nationwide Building Society (now known as ‘Irish Bank Resolution Corporation’ or IBRC), according to Fianna Fáil Finance Spokesperson Michael McGrath.
“Since 2009, the Irish state has recapitalised Irish banks to the tune of €62.8 billion. Over half of this recapitalisation came directly from exchequer funds and from the National Pension Reserve Fund with the balance coming from a promissory note structure. The promissory note structure provides for the recapitalisation of IBRC by an amount of €30.6 billion.
“Minister Noonan has a very strong case to put to Mr. Draghi for an easing of the burden of debt on the Irish State associated with the rescue of the former Anglo and Irish Nationwide. The rescue of the Irish banking system by Irish taxpayers undoubtedly insulated other European countries from a disorderly collapse of Irish banks.
“In addition, the other key point for Minister Noonan to stress is that there was no European source of funding available for the recapitalisation of banks when the promissory note was issued by the previous Government in 2010. The ECB was then, and continues to be, insistent that senior bondholders would not be allowed to share the burden of the cost of rescuing banks. Since July 2011, other Eurozone countries are permitted to access the European Financial Stability Fund (EFSF) to recapitalise their banks.
“I believe that Ireland has a compelling case for the new funding stream in the European Union to be deployed to ease the burden of debt on Irish taxpayers. Fianna Fáil will support the Government in their efforts to achieve this. At the very least, Minister Noonan should today seek a timeline from Mr. Draghi for the conclusion of these negotiations. If there is no tangible outcome to today’s talks, suspicion will grow that the Government is once again heightening expectation merely to deflect attention from the payment of €1.25 billion to an unguaranteed, unsecured Anglo bondholder tomorrow.”