Kenny says bondholders must be paid €1.2bn

Thu, Jan 26, 2012, 00:00

THE TAOISEACH insisted in the face of strong Opposition criticism that Ireland had to pay the €1.25 billion owed to unsecured bondholders.

“It is not easy to say this, but the money must be repaid,” Enda Kenny said. “The alternative would be catastrophic, given what has happened in Greece, where 100,000 public servants have been let go, public sector salaries have been drastically reduced and services decimated.”

Mr Kenny added that that could not be allowed to happen in Ireland.

Sinn Féin leader Gerry Adams said it was one of the Taoiseach’s big days, the day in which he gave another €1.25 billion to bondholders while imposing savage austerity on the rest of the citizens.

Asking Mr Kenny to name the bondholders, Mr Adams said the Oireachtas and the people had a right to know who they were.

Mr Kenny said he did not like to see a situation where the repayment had to be made to bondholders.

“I do not have have the list of their names, but I am sure the names of those in possession of the bonds have changed often since they were first acquired,” he added.

He said Mr Adams had failed to point out where the money to provide services for the people would come from if Ireland defaulted.

“He is aware that we have received €110 billion for the covered banks at very low interest rates to keep the country moving,” Mr Kenny added.

He said Mr Adams’s idea that the Government could state it would not pay was simply nonsensical.

Mr Adams said it was not good enough for Mr Kenny to say he did not know the names of the bondholders.

“It is a disgrace,” he added.

He said that the deference the Taoiseach was showing to bondholders contrasted sharply with his attitude to citizens.

Mr Adams said he had written to the Comptroller and Auditor General asking him to investigate the payments, to whom they would be made, the profits to be made and whether he considered it to be an appropriate use of public funds.

Mr Kenny said Mr Adams was a “great man” to come into the Dáil and talk about openness, transparency and accountability.

“There were many occasions when he was not so open in his comments,” he added.

“I do not have a list of the bondholders.”

Independent TD Shane Ross said it was a dark day for Ireland by any measure.

“Whatever the Taoiseach’s likes and dislikes about what is happening, it is a dismal day when we must hand over €1.25 billion.”

He was concerned about the Government’s response to legitimate criticisms on what it was doing, which was, after all, implementing the policies of the previous government.

Accusing the Government of using “scare tactics” in recent days, Mr Ross said they had not contributed constructively to the debate.

Tánaiste Eamon Gilmore had spoken of not being able to pay gardaí, nurses or teachers, while Minister for Transport Leo Varadkar had spoken of a financial time-bomb going off in Dublin, he said.

“Let us have a legitimate argument about this,” Mr Ross added.

He said the Taoiseach should look at the history of the markets which forgave those who wrote off their debt provided the future looked bright enough for them to lend.

Mr Kenny said it seemed that the “Ross theory of economics” meant that the Central Bank should be able to create new money to pay off the debts of Anglo Irish Bank, making them disappear by magic.

That type of “airgead draíochta” was the kind of formula which caused the monetary chaos and economic collapse of the post-Soviet Union rouble zone in the early 1990s.

This year, Mr Kenny said, €3 billion had to be taken out of the economy.

“Deputy Ross’s formula is to deal with the deficit of €16 billion in one fell swoop,” he added.

“Does he seriously consider that something of this magnitude could be done without catastrophic consequences for the ordinary citizens of the country?”