Promissory deal needed in order to exit bailout


A deal on Anglo Irish Bank promissory notes and bank debt is required for Ireland to “successfully exit” the EU-IMF bailout programme this year, Taoiseach Enda Kenny has said.

He was speaking at a press conference with European Commission president José Manuel Barroso and Tánaiste Eamon Gilmore following meetings between Cabinet ministers and the College of Commissioners, who are in Dublin for a meeting of the European Council.

Mr Kenny said no other country had been burdened with similar levels of bank debt, and this fact had been recognised by the German chancellor and the French president.

The Taoiseach said he told the College of Commissioners that Ireland’s recovery is in the interest of the EU as a whole.

Breaking the link

“The solidarity that we all speak of ... is a two-way street and for Ireland to exit its programme successfully we do need a conclusion to the negotiations on the promissory notes on the one hand and the conclusion, eventually, on the discussions on a banking deal arising from the decision of the 29th of June on breaking the link between sovereign and bank debt,” he said.

Mr Barroso said the commission was working hard to ensure the link between sovereign and private debt was severed, adding that Ireland’s bank debt burden could only be eased after the establishment of a single supervisory mechanism.

He declined to speculate as to when technical discussions on such a banking union might be finalised.

Mr Barroso called on the EU’s member states to stick to the spirit of the agreement reached in June, which promised to break the connection between sovereign and bank debt.

“I was always making the case for the need for solidarity with Ireland and the need for fairness within Europe,” he said. “You have the full support and the goodwill of the commission as you face the challenges ahead.”

Mr Kenny welcomed the commission chief’s support, which echoed comments by European Council president Herman Van Rompuy earlier this week restating Ireland’s position as “special case” for securing a deal on its bank debt.

Issue of fairness

“We do need the conclusion and the demonstration of assistance from our European colleagues,” Mr Kenny said. “And I’m very glad president Barroso has referred to the issue of fairness.”

Mr Barroso was optimistic about Europe’s overall prospects for recovery. He said the time for taking emergency decisions should now be over and the “doomsday scenario” of a euro zone break-up had not come to pass.

He insisted that the crisis in Europe had now entered a new stage, where restoring confidence was the key priority. “We are in a better situation today,” he said.

“We have shown the naysayers that we are willing to do all that is necessary to ensure the stability of the single currency.”