Opposition demands better terms

Mon, Jun 11, 2012, 01:00

IRISH REACTION:THE GOVERNMENT is facing Opposition demands to secure better terms on Ireland’s bank debt following news of the €100 billion assistance programme for the sector in Spain.

Fianna Fáil has called on the Taoiseach to take a stronger line and Sinn Féin said people would be asking why the Government did not get the same terms as Spain.

“The shape of the bailout deal for Spanish banks is deeply disappointing and reinforces the current euro zone policy that ordinary citizens would ultimately bear the burden,” Fianna Fáil finance spokesman Michael McGrath said.

He added: “It had been hoped that agreement could be reached to enable Europe to directly recapitalise the Spanish banks and avoid the debt being attached to the Spanish state.

“This would have been a ground-breaking development and would have opened up major possibilities to revisit the bank debt in Ireland.”

Mr McGrath said: “The Government here has utterly failed so far to achieve any reduction in the burden of bank debt.

“The Taoiseach hasn’t even asked for a write-down of our bank debt.”

Sinn Féin finance spokesman Pearse Doherty said: “Spain will pay less for their loans that the Irish Government currently does. Spain’s debt and deficit reduction strategies will be determined by their own government.

“There will be no troika reviews and no detailed memorandum of understanding dictating tax increases, cuts in social welfare payments or sale of valuable state assets.”

He added:“Many Irish people looking at the deal today will be asking themselves why is there one set of conditions for us and another for Spain? More importantly, they will be asking why the Irish Government was not able to secure these kinds of conditions.”

Minister of State at the Department of Finance Brian Hayes said the Spanish deal, as well as other events such as the passing of the fiscal treaty, reassured people about the stability of the euro.

“Our view is that an EU-wide solution where banks could be recapitalised through emergency funding, without the debt then going on the national debt of the respective countries, would be the better way to go,” he said.

Mr Hayes added that the deal had benefits for Ireland in terms of greater stability in the euro zone.

In a statement on Saturday evening, Minister for Finance Michael Noonan said: “This announcement will provide much-needed confidence and stability in the euro zone.”

He said that “this will be particularly important for Ireland’s economy as the euro zone crisis has weighed on our economic growth over the past year”.

Mr Noonan said the provision of €100 billion for Spanish banks would “provide a significant safety margin beyond the recapitalisation requirements”.

He added: “The funds will be provided through the EFSF/ESM at the same interest rates which apply to funds provided to other programme countries.”