Devil is in the detail as debt deal campaign intensifies

Beyond the technical and legal details, negotiators know any concessions to Ireland require wider political support in Europe

Lucinda Creighton fairly bounced out of Berlin’s foreign ministry on Monday evening. A long day of meetings ended for the Minister of State for European affairs over dinner with senior German government officials.

The menu of duck with pumpkin dumplings was as wintry as the snowy streets outside, but Creighton was pleased to find the dinner table talk warm and “very upbeat” towards Ireland.

“I had very positive signals that the German government is fully supportive of the Irish request to resolve the promissory note issue,” she said. “There was very explicit support for a deal.”

Other diners confirmed her reading of the runes. After years of negotiations, where the word “breakthrough” has ceased to have all meaning, was this another mirage or a significant step forward?

Legally speaking, Berlin has nothing to do with the €30.6 billion promissory note, loans granted in 2010 by the European Central Bank (ECB) to stabilise Anglo Irish Bank and Irish Nationwide.

Government talks to ease the debt burden of this loan by extending the 10-year repayment plan – and thereby reducing the annual €3.1 billion repayments – are being conducted exclusively with Frankfurt.

The next day, senior officials in several cities with knowledge of the talks insisted the situation was “delicate” and “extremely sensitive”. Central Bank Governor Patrick Honohan rowed in to insist that any deal is far from “done and dusted”. Not everyone was thrilled by Creighton’s public assertions, but no-one denied them either.

But, beyond the technical and legal details, concessions to Ireland require wider political support around Europe.

Thus Creighton travelled to Berlin to tell an audience at the Konrad Adenauer Foundation that such a deal was “in Ireland’s interests but also in the European interest”.

Hers was the latest in a concerted Irish campaign since the new year to convince Germany that all is not well in Ireland and that further concessions are needed to ease the country’s debt burden.

Sullying one’s own stellar reform reputation is a risky negotiating strategy but, by and large, the German media has picked up on and amplified this message in a differentiated fashion.

This week it was the turn of the Handelsblatt business daily to note that, despite Ireland’s “remarkable” progress, it faces a “fragile recovery” where “not all is rosy”.

In an interview, Tánaiste Eamon Gilmore compared Ireland to the fabled Dutch boy who stuck his finger in the dam to stop a devastating breach.