Doubts on IBRC deal 'fanciful'

The offices of Irish Bank Resolution Corporation at Connaught House on Burlington Road. Photograph: Alan Betson

The offices of Irish Bank Resolution Corporation at Connaught House on Burlington Road. Photograph: Alan Betson

Sun, Feb 17, 2013, 00:00

Minister of State for Finance Brian Hayes has dismissed as “fanciful” reports that the promissory note deal could unravel.

Bundesbank president Jens Weidmann has voiced concern that Ireland’s promissory notes deal came perilously close to illegal monetary financing, while former ECB president Jurgen Stark said the arrangement contravened EU Treaty rules.

Mr Hayes today insisted the arrangement would continue as planned.

“The promissory note arrangement is solid…the notion that in some way there isn’t a deal here, there isn’t an agreement, is just fanciful,” he said.

“Every serious economic commentator has welcomed this arrangement that we have put in place because it gives us breathing space and flexibility.” Mr Hayes was speaking on RTE’s The Week in Politics programme.

“The suggestion now that there’s no agreement that some people are trying to put forward now is utterly ridiculous. We have an agreement we have an arrangement and more importantly that arrangement will lead to significant benefits for this country in the short, medium and long term.”

A Department of Finance spokesman said the Department had “no concerns” in relation to comments that had been made about the deal over the weekend. Referring to ECB president Mario Draghi’s remark that the bank “unanimously took note” of the plan, the spokesman said:

“We fully respect the ECB’s right to continue to monitor to make sure everything is done in accordance with their rules”.

He added: “We are working to implement the deal now.”

Meanwhile, the Department declined to comment on reports that the legislation brought forward to liquidate the Irish Bank Resolution Corporation will have to be changed.

The legislation put a stay on all legal actions taken against the bank, including that by the Quinn family.

Sinn Fein’s spokesman on finance Pearse Doherty renewed his attack on the promissory note deal yesterday. “This deal isn’t the type of deal which the Irish people wanted. It’s not what they deserved. What people wanted was a write-down of this debt,” he told RTE.

“The fact that this is even being questioned now by senior people in Germany should give the Government an impetus to go back to the table and demand a write down on this debt.”

Fianna Fail Spokesperson on Finance Michael McGrath has called on Minister for Finance Michael Noonan to clarify the impact of the liquidation of IBRC on Credit Unions who hold investment products with the former State-owned bank.

"I have been contacted by a number of Credit Unions who hold a certain tracker-type investment product with IBRC and who now fear the value of the investment will be lost as part of the liquidation of the bank,” Mr McGrath said.