FG seeking €17bn cut in unguaranteed bond debt

Fri, Dec 17, 2010, 00:00

KENNY ADDRESS:FINE GAEL leader Enda Kenny has said his party will campaign in the general election for a mandate to cut up to €17 billion from some €25 billion of unguaranteed senior bond debt in a number of Irish banks.

On his way to a meeting of the European Peoples’ Party group in Brussels before last night’s EU summit, Mr Kenny said he would raise this question with centre-right European leaders such as German chancellor Angela Merkel.

After addressing the Brussels branch of the Institute of International and European Affairs, he also expressed the hope that a looming revision to the Lisbon Treaty will not necessitate a referendum in Ireland.

“We would have no contemplation of defaulting on the sovereign debt and no intention of default on senior guaranteed bondholders, but the fact of the matter is that there is now €25 billion of unguaranteed bonded debt for which the Irish taxpayer is now being asked to accept liability,” he said.

“I think that’s a crushing burden and it’s something that we should do something about.”

However, the possibility of a serious and substantial saving to the taxpayer was on the table.

“Insofar as Fine Gael are concerned we will seek a mandate from the people as part of our programme that we should be given the authority and a mandate from the people to renegotiate this element of what is crushing debt on our taxpayers now. You could save €12 billion, €15 billion, €17 billion I would reckon.”

Mr Kenny said another EU referendum at this time would not be helpful.

“It would be entirely in keeping with the people’s mood that you would be able to sort out a longer term solution for banking difficulties without having to have a referendum.”

Speaking on RTÉ’s Six-One News, the head of International Monetary Fund’s mission to Ireland Ajai Chopra said the IMF would be monitoring Irish government policies to ensure certain targets were met.

However, he added that the IMF could not be “completely rigid” and that policies could be adapted as long as they were consistent with the overall targets of the plan. Asked about the effect of a change of government, Mr Chopra said different parties would have different priorities and there was always room for discussion.

He would not speculate on any possible discussions between the EU and any Irish government on the interest rates charged for the emergency funding.