Department denies welcoming statement of three finance ministers following fierce criticism

Thu, Sep 27, 2012, 01:00

THE DEPARTMENT of Finance has moved to defuse controversy over its reaction to the joint statement from the German, Dutch and Finnish finance ministers on the separation of bank debt from government debt and the role of the European Stability Mechanism (ESM).

The Department came under fierce criticism yesterday morning from Opposition TDs in the Dáil, who claimed it had welcomed the statement of the three ministers.

Independent TD Shane Ross from the Technical Group said the Department’s reaction was “farcical” and added: “That is utter nonsense, and if it is the case, someone should be fired from the department immediately.”

Sinn Féin’s Mary Lou McDonald asked the Taoiseach: “How is it, in the name of all sanity, that the Department of Finance of Deputy Noonan last night welcomed the statement from these three ministers that told us, if not to drop dead, certainly to get lost?”

But a spokesman pointed out that the department statement had welcomed the fact that the three finance ministers were “recognising the recent positive review of the Irish programme”.

The department had also welcomed “their ideas on how to give effect to the decision of euro zone leaders that the ESM should have the capacity to recapitalise banks directly”. It made no reference to the issue of timing.

Speaking in the Dáil yesterday afternoon, Minister for Finance Michael Noonan said: “A number of Deputies were disingenuous in attributing statements to my Department.”

Fianna Fáil finance spokesman Michael McGrath said the statement by the finance ministers was “a major setback to the efforts to secure an overall deal on this country’s bank debt”.

“The bottom line is that the June summit agreement will not be implemented without the support of the Germans, Dutch and Finns,” he added.

Mr Noonan replied: “We are engaged in a diplomatic offensive to implement the decision of June 29th to break the link between banks and the sovereign and enhance the sustainability of our debt.”

The Repudiate the Debt Campaign said in a statement: “The Irish people – like their counterparts in Greece, Spain, Portugal, and Italy – are being sacrificed to ensure that the German and other major finance houses in the core EU countries are sustained.

“Nothing has changed from that basic position.”