Gilmore says no U-turn on strategy for bailout cut

TÁNAISTE Eamon Gilmore has denied that the Government has done a U-turn on its strategy to negotiate a cut in interest rates at the EU summit.

Sinn Féin deputy leader Mary Lou McDonald claimed there had been a reversal of the Government’s strategy in negotiating a reduction in interest rates on the EU-IMF loan.

“The Government’s negotiating strategy, which was watery weak to begin with, has now plunged into utter incoherence,” she said and asked why the “much trumpeted strategy around getting a deal on the interest rate for the bailout is now off the table”.

The Tánaiste insisted however: “there is no U-turn”.

He said: “I assure Deputy McDonald and every other member in the House that the Taoiseach’s work today is to do the very best for this country and he has the full support of the Government in doing that. I’m sure he will have the full support of every member in the House in doing it.”

Taoiseach Enda Kenny later said it would be best to wait for the bank stress test results before renegotiating the €85 billion package.

Ms McDonald said the media had reported that the interest rate negotiations were off the table and the media “is not the place any deputy elected to the house should learn of such a change in the Government’s position. This is especially true today when bond yields have risen over 10 per cent and the position of the State is so precarious and fragile”.

Joe Higgins (SP, Dublin West) said: “the reality is that the Taoiseach and the Government are in full flight before the wrath of Chancellor Merkel and that Deputy Kenny has been warned not to raise the issue this weekend because of the difficulties of the European People’s Party in various member states”. Mr Higgins added that “it’s frankly a pathetic capitulation in front of the European establishment”.

But Mr Gilmore retorted that “rather predictably of course Deputy Higgins is already declaring sellout and capitulation and various other denunciations before there is any outcome. Deputy Higgins you’re being tediously predictably in all of that,” he said.

Former minister for finance Brian Lenihan called for the Government to follow the previous administration’s practice and make a statement to the House on the bank stress tests. He asked for the statement to deal specifically with the “amounts of capital required and if an extension of burden sharing beyond the subordinated bonds already subject to burden sharing”, could be agreed. Mr Lenihan said his government “raised this question with regard to unguaranteed senior debt at the time of the EU and IMF discussions”.

A statement was very important because “nothing would damage our international reputation more than uncertainty on an issue of that character”.

The Tánaiste said the Minister for Finance would make a statement and that “will depend on when the stress tests are announced and made available”.