Gilmore urges caution over relying on Spain for move on bank debt

IRELAND must be careful that “we don’t hang our hat entirely on the Spanish situation” in a bid to reduce the burden of bank debt, Tánaiste Eamon Gilmore has told the Dáil.

He said: “It may be that a solution will be found to the Spanish banking system which is translatable to Ireland”. He added, however: “We do have to be careful that what may be applicable to Spain may not be directly applicable to Ireland and we have to have a solution which is suitable for Ireland.”

As the crisis in Spanish banking dominated European affairs, Mr Gilmore yesterday travelled to London for talks with Britain’s foreign secretary, William Hague, which included discussions on banking debt.

Mr Gilmore told the Dáil he would also be travelling to Paris shortly as part of the Government’s discussions with European leaders to secure relief for the Irish taxpayer from the burden of a “huge level of bank debt”.

The Government is in discussions with European leaders to secure political support for a deal in respect of Irish bank debt. Ireland, however, had to be careful that “we don’t hang our hat entirely on the Spanish situation”.

He rejected claims by Sinn Féin deputy leader Mary Lou McDonald that he and the Government “are now hedging your bets as to whether or not the Spanish might pave a way for some resolution to our debt burden”.

Ms McDonald accused the Tánaiste of “fudging” the issue and of having “sold the people a pig in a poke”. She said: “You will fuddle along in the hope that Spain will save your blushes.”

The Dublin Central TD had asked the Tánaiste to give a clear answer as to what the Government was seeking now from the EU in relation to Ireland’s bank debt.

She asked about the content of the conversation between Taoiseach Enda Kenny and German chancellor Angela Merkel in the wake of Ireland’s Yes vote on the fiscal treaty.

Despite the referendum outcome, Germany was reported to be resisting any write-down of Irish debt and Mr Kenny refused to be drawn on Wednesday on the detail of the conversation.

Dismissing Sinn Féin’s approach as “sneering”, Mr Gilmore said there were ongoing discussions with the troika and at official levels “where Irish officials have been working with the European commission and the European Central Bank on ways in which the Irish bank debt can be alleviated”. The Government “is in discussions with European leaders to secure political support for a deal in respect of Irish bank debt”.

He added: “We have a clear objective to minimise that burden. We are doing those negotiations and we have been working on this for quite some time.”