Coalition rejects seeking Anglo concession to secure Yes vote

Fri, Mar 2, 2012, 00:00

THE GOVERNMENT has moved to quash suggestions from within Cabinet that Europe should cut the cost of Ireland’s bank debt burden to boost support for the fiscal treaty referendum.

The Taoiseach, Tánaiste and Minister for Finance moved swiftly yesterday to declare that there should be no link between the referendum and the Government’s drive to ease the terms of the Anglo bailout.

They were responding to remarks by Minister for Social Protection Joan Burton in which she said a move to restructure the expensive IOUs used to recapitalise Anglo would aid the referendum campaign.

“Of course it would be helpful because €3.1 billion is almost as much as the cuts that have taken place annually,” she told the Financial Times in relation to a promissory note payment due on March 31st.

However, Taoiseach Enda Kenny said the Anglo debt question was an entirely separate matter from the referendum on the treaty.

“These are entirely separate matters, in other words, the Irish people are not going to be bribed by anybody,” Mr Kenny told reporters in Brussels.

“That work is entirely separate from the treaty, and in due course the Government will set out a process by which this will be set before the people.”

Senior European officials are very sceptical that the Government would receive any concession on the Anglo notes if it did push for a quid-pro-quo during the referendum campaign.

While officials within the EU-IMF troika see merit in the Government’s push for a concession, Germany remains opposed.

Tánaiste Eamon Gilmore adopted a similar position to the Taoiseach in the Dáil, saying the Government was not going to “trade the constitutional rights of the Irish people with anybody or for anything”.

Likewise, Minister for Finance Michael Noonan said the Irish people would not be subjected to coercion or inducement.

“The Irish people are great respecters of their Constitution and, on this as on other occasions, they want to be allowed consider the facts of the treaty and make a balanced judgment,” he said.

The Taoiseach was speaking in advance of last night’s European summit at which EU leaders took stock of their battle against the financial crisis. He will sign the treaty at a ceremony this morning.

Bowing to German pressure, the leaders scrapped plans for a special euro zone summit today to expand the ESM bailout fund.

Still, German sources told local media that Chancellor Angela Merkel will change her stance this month because her EU and global partners have set their hearts on the “psychological effect” of a larger fund.

The implicit criticism of Ms Burton came on the day in which Mr Noonan wrote to EU economics commissioner Olli Rehn to complain about the leaking of a private report on Ireland which the commission made to a German parliamentary committee.

The report on the latest EU-IMF troika review of the Irish bailout was submitted ahead of a vote by German MPs on the release of Ireland’s next round of rescue loans.

The commission also criticised the disclosure. “Breaches of confidentiality undermine this process, and are harmful to the efforts that are being made in countries under programmes to comply with the conditionality required of them,” it said.

The commission separately approved the disbursement of €5.8 billion in loans to Ireland, a move which brings the total EU funding to Ireland to €32.2 billion under the bailout.

In the Dáil, Mr Gilmore acknowledged being “unhappy” at the disclosure of the commission document to the finance committee of the German parliament.

He said he intended to pursue the matter himself and “discuss it with our ambassador in Berlin and to ensure the way in which this document was handled is not repeated”.