Rabbitte criticises 'glee' over Merkel remarks

Mon, Oct 22, 2012, 01:00

BANKING DEBT:MINISTER FOR Communications Pat Rabbitte has criticised the “orgy of negativity” and the “glee” that have greeted German chancellor Angela Merkel’s comments on efforts to break the link between bank and sovereign debt.

The Government said it would continue to make a “sustained case” in negotiations on refinancing banking debt despite an apparent rebuff on Friday by Dr Merkel to claims of solid progress.

Moments after Mr Kenny declared in Brussels that he had achieved solid progress overnight at a tense EU summit, Dr Merkel moved abruptly to curtail the scope of the effort to break the link between bank and sovereign debt.

The chancellor’s intervention, which took high-level EU figures by surprise, has cast a new cloud of uncertainty over the feasibility of Mr Kenny’s demands.

For the first time in public she backed her finance minister, Wolfgang Schäuble, in his assertion that national bodies must remain responsible for most banking debts.

This is markedly at odds with the push from Mr Kenny and the leaders of France, Italy and Spain for the European Stability Mechanism bailout fund to pay for historic banking losses.

Speaking on RTÉ radio yesterday, Mr Rabbitte said there was no change to the agreement made on June 29th in which the 27 heads of state agreed to separate bank and sovereign debt.

“Yes, the chancellor did give a press conference...but the formal legal position of the council stands until it’s changed. And it stands with the agreement of 26 other heads of state including the German chancellor.

“I have some difficulty in understanding the almost glee in some parts of this country. To hear the leader of Fianna Fáil wishing to do down the country because he thinks he might score a point on the Taoiseach was a position more fitting to the leader of Sinn Féin. That’s the kind of thing one expects from Sinn Féin, but one doesn’t expect it from a man who was around the table who got us into this mess in the first place.”

Tánaiste Eamon Gilmore said he was concerned by Dr Merkel’s comments but said a distinction needed to be made between what one leader said at a press conference and what 27 had agreed to do at a formal European council meeting which included Dr Merkel.

Minister for Jobs Richard Bruton also said the June agreement “absolutely still stands”.

Questioned on Saturday about the Merkel comments, Mr Bruton said: “The truth is that what the council decided is that the EU finance ministers must now go and design what the European Stability Mechanism will do. That’s what they have to do – decide its mandate. And it will become effective once the bank supervision is in place.”

A deadline of January 1st has been put in place for the legislation on banking supervision.