Rabbitte says €3bn note will not be paid


Minister for Communications Pat Rabbitte has said categorically the Government will not pay the instalment of €3.1 billion due next March on the last government’s €30 billion promissory note for the former Anglo Irish Bank.

“[The Government] didn’t pay the promissory note this year and as far as I’m concerned we’re not going to pay it next year. It’s as simple as that,” he said.

“We can’t pay. This was an IOU entered into by the previous government when the Anglo Irish Bank collapsed and the notion of us paying it next March doesn’t arise.”

Mr Rabbitte was speaking on RTÉ’s The Week in Politics last night, where he said a comprehensive deal on bank debt next year would have the effect of reducing the target for Ireland’s current deficit in 2014 from about 7.5 per cent to 6.4 per cent.

The Fianna Fáil spokesman on Finance, Michael McGrath, who also appeared on the programme, said his party supported the Government’s effort in this regard but that the European Central Bank was an intransigent organisation.

Sinn Féin’s Pearse Doherty criticised the Government for its failure to tackle bank debt despite being two years in power.

Responding, Mr Rabbitte said: “The ECB is a difficult institution to bring around to stamping the deal that we need but I believe that we will get that deal and I believe that we will get it before it falls due in March.” He accused Sinn Féin of indulging in “fairytale economics”.

Mr Rabbitte’s comments were stronger than those made in recent weeks by Taoiseach Enda Kenny and Minister for Finance Michael Noonan. However, spokesmen for both Ministers said his comments were in accord with Government policy.

A spokesman for Mr Noonan said that the Minister was in discussions with the troika with a view to not paying the promissory note due for payment on March 31st.

In the Dáil last month, Mr Kenny said the intention was that the note “will have been re-engineered in such a way as to ensure we will not have to fork out €3 billion. That is our hope and intent.”

Speaking later to The Irish Times, Mr McGrath called on Mr Noonan to clarify if Pat Rabbite’s statement represented Government policy.

“Michael Noonan has said that the promissory note would be honoured in the absence of an agreement. What Pat Rabbitte said is a major departure from that position,” he said.

Political moves: What to watch for

TuesdayFine Gael party meeting

WednesdayLabour Party meeting

WednesdaySinn Féin motion of no confidence in Government

ThursdayVote on Social Welfare Bill which gives effect to budget adjustments