EC calls for Irish debt repayments

 

The European Commission has said it supports Ireland’s efforts to regain market confidence but that it is “of the utmost importance” that the State honour its debts.

In a statement this afternoon, the commission said it was exploring avenues to further strengthen the domestic banking sector “such that it can better provide credit to the economy and support the recovery” and that it was engaging with Irish officials over the controversial Anglo Irish Bank promissory notes.

The statement followed criticism in the Dáil today of European commissioner for monetary affairs Olli Rehn over comments about Ireland’s promissory note commitments.

The Government will have to pay the €3.1 billion bank debt due within days after the European Commission ruled out delaying the payment in anticipation of a deal to ease Ireland’s banking debt.

Speaking in Brussels yesterday, when asked about flexibility on Ireland’s repayment, Mr Rehn said “each and every member state respects the commitment it has undertaken and this is valid in the case of Ireland as well”.

Accusing Mr Rehn of being “patronising”, Independent TD Shane Ross told the Dáil today the Finnish commissioner embarked “upon a kind of lecture to us and the rest of Europe about our obligations”.

Mr Ross called on Taoiseach Enda Kenny to tell the commissioner that Ireland was "not given to taking lectures" from Europe. "You are the most compliant Taoiseach, the most compliant leader in Europe, and I don’t think you should take it from him," the Dublin South TD said. “He went on to tick us off in Latin, no less.”

</p> <p>Mr Rehn had said the Government was obliged to meet all its debts. “I actually wonder why this has to be asked at all because the principle in the European Union and in the long European legal and historical tradition is in Latin - <em>pacta sunt servanda</em> - respect your commitments and obligations," he told reporters in Brussels yesterday.</p> <p>Mr Ross said of the commissioner: “Before he breaks into Latin, I suggest he should brush up on his Greek, because Greece was the first exception to the rule he was making yesterday. Spanish was the second exception to the rule, and that was only yesterday. Spain was given leeway on its budget deficit.”</p> <p>In response, the Taoiseach described Mr Ross as “probably one of the most erratic economists" he had ever come across.</p> <p>"Spain has to comply with the 3 per cent by the end of next year. Ireland was given an extra year from the end of 2014 to the end of 2015," he said. "Commissioner Rehn was speaking in regard to Spain and Hungary and Greece and has the same status as every other commissioner."</p> <p>Mr Kenny told the Dáil: “These negotiations are being conducted by the troika. I don’t know if all the commissioners know all the details of all the discussions."</p> <p>Referring to Mr Ross’s remarks about Latin, Greek and Spanish, the Taoiseach told him: “Always remember the old Gaelic tongue in ancient times was one of the prime languages of Europe, and there’s an old saying in there that’s very important for everyone to remember - when negotiations are under way, is binn beal ina thost [you’re better off keeping silent].”</p> <p>Earlier, Fianna Fáil leader Micheál Martin said the Taoiseach had made promises about keeping people informed, using the phrase: "Paddy likes to know". But Mr Martin said that in relation to the promissory note and talk of flexibility or write-downs, "Paddy doesn't know".</p> <p>When the Taoiseach told him he had never raised expectations or put a time limit on discussions, Mr Martin said nobody on the Opposition side was raising expectations but that Ministers "in competition" with each other were.</p> <p>Sinn Féin leader Gerry Adams said the €3.1 billion payment due at the end of March was worth "319 years of the household charge". He said the Government was not asking for a writedown or flexibility, "but if you don't ask you don't get".</p> <p>The European Commission’s stance, which mirrors that of the European Central Bank, means the Government will have no option but to pay the bill when it falls due on March 31st.</p> <p>The money must be repaid under an EU-backed arrangement under which Dublin is recapitalising the former Anglo Irish Bank and the former Irish Nationwide Building Society with expensive IOUs known as promissory notes.</p> <p>The Government has campaigned for months to restructure this costly scheme, which will see the State pay €47.4 billion in capital and interest charges to support these institutions – now known as Irish Bank Resolution Corporation – for 20 years.</p>