O’Reilly hits out at ECB for lack of transparency on Irish bailout

Ombudsman claims bank blocked disclosure of letter that ‘bounced’ Ireland into bailout

Ombudsman Emily O’Reilly claims  ECB blocked disclosure of letter that bounced Ireland into taking bailout in 2010.

Ombudsman Emily O’Reilly claims ECB blocked disclosure of letter that bounced Ireland into taking bailout in 2010.

Fri, Mar 7, 2014, 10:05

The European Ombudsman Emily O’Reilly has said the European Central Bank has “wasted an opportunity for openness and transparency” by refusing the release the November 2010 letter from it to the Irish government that allegedly bounced Ireland into the bailout.

The letter was sent by then ECB president Jean Claude Trichet to the then minister for finance Brian Lenihan at height of the financial crisis called on the Irish government to take swift action to protect the stability of the Irish financial system.

The European Ombudsman Emily O’Reilly said: “I regret that the Governing Council of the ECB has wasted an opportunity to apply the principle that, in a democracy, transparency should be the rule and secrecy the exception.”

“At a time when so many people have been, and are, suffering as a result of austerity arising from the economic crisis, the very least a citizen can expect is openness and transparency from those who make decisions that directly impact on their lives and on the lives of their families,” she continued. “Following an inspection of the letter, I am unconvinced by the Governing Council’s explanation for continuing to keep it secret.”

Journalist Gavin Sheridan first requested the release of the November 2010 letter in December 2011.

In a statement the European Ombudsman’s office said he did so because: “He suspected that it included pressure on the Irish government to enter the EU’s bailout programme.”

The ECB repeatedly refused to disclose the letter to Mr Sheridan because it claimed it needed to protect Ireland’s financial stability, so he then complained to the European Ombudsman.

“According to the ECB, the letter was sent in the context of significant market pressure and extreme uncertainty as to the prospects for the Irish economy,” the ombudsman’s statement said.

“After having inspected the letter, the ombudsman concluded that the ECB had been right to refuse access to the document at the time of the request for access. However, as more than three years have passed since the letter was sent, she proposed that the ECB now disclose the letter in order to underline its commitment to transparency.”

The ECB, the ombudsman said, had however blocked the letter’s disclosure. It claimed this was, the ombudsman said, on the grounds that the protection of the public interest as regards monetary policy in the European Union and financial stability in Ireland continues to justify confidentiality.

“The refusal yet again emphasises the culture of secrecy in which many European institutions operate,” Mr Sheridan said. “Despite the clear public interest in releasing the letter which the Ombudsman acknowledges, the ECB clearly believes it can operate with impunity. The decisions of the ECB, and its communications with the elected governments of Member States, are ones that European citizens should have access to, particularly in this context where Ireland has exited from the bailout and communications are a matter of record.” Mr Sheridan said similar communications had come into the public domain in Italy via a leak to the media and in Spain in a book written by a former government leader. “Unfortunately the EU Ombudsman has no power to compel the ECB to release the letter - her office should be empowered in this regard,” Mr Sheridan said.

In an interview with The Irish Times in April 2011 Mr Lenihan said that the letter “bounced” Ireland into an EU / IMF bailout and this letter “raised the question about whether Ireland would be participating in a programme at that stage”.