ECB backed Ireland in getting pledge for bank bailout review
THE EUROPEAN Central Bank pushed for a specific pledge to review the Irish bank bailout during last week’s EU summit, it has emerged.
The bank, which resisted many previous attempts to ease the burden of Ireland’s banking debt, played a pivotal role in the adoption of an explicit pledge by euro zone leaders to look again at the deal.
The focus this week moves to the the latest quarterly review of Ireland’s bailout programme which begins today.
Officials from the troika – the European Commission, the European Central Bank and the International Monetary Fund – arrive in Dublin for the seventh review of the programme agreed in November 2010.
Government sources said last night they were confident Ireland would meet all the conditions in the review which will last 10 days.
It emerged yesterday that German ECB executive board member Jörg Asmussen aligned the bank with the Government’s push for a specific reference to Ireland in the communique issued at the end of last week’s EU summit.
The move to reopen the deal came only in the third and final draft of the communique, which was drafted by Mr Asmussen and a clutch of other high-ranking EU officials.
As German chancellor Angela Merkel gave the go-ahead to discuss direct aid for Spain’s banks, Irish negotiators were told from the outset of the talks that any pledge to Madrid would not necessarily create a precedent for Dublin. This led Taoiseach Enda Kenny to insist on a direct reference to Ireland, saying he could accept nothing less.
As the talks continued into the early hours of Friday morning, Mr Kenny is reputed to have instructed officials to “keep taking the tablets” as they pushed repeatedly for a direct reference to Ireland.
However, there was scant support initially for the Irish position among other countries, and the Netherlands and Finland resisted.
To many of the top European officials present, the Irish question was not the main event, given the focus on Spain and on Italy’s demands to have Europe’s bailout funds buy up Italian bonds.
A European diplomat said Mr Asmussen’s intervention had a crucial bearing on the outcome when the final draft of the communique came to be written.
Chief of the European Financial Stability Facility Klaus Regling was also broadly sympathetic to the Irish position, the diplomat added.
Although the direct reference to Ireland in the final draft surprised some senior figures around the summit table, Mr Kenny successfully defended it in the face of questioning from Dutch prime minister Mark Rutte and Finnish leader Jyrki Katainen.