FF urges Kenny to halt payment of Anglo bond bill

 

FIANNA FÁIL has called on Taoiseach Enda Kenny to contact the new European Central Bank president Mario Draghi today in a “last-ditch” effort to stop the full repayment of the €715 million unsecured Anglo Irish Bank bond.

Mr Draghi takes over today as ECB president from Jean Claude Trichet and the €715 million bank bond is due to be paid tomorrow.

Fianna Fáil finance spokesman Michael McGrath said the Government’s “weak negotiating strategy” had allowed an expectation to grow in the markets that the bond would be paid in full.

The Taoiseach should impress on the ECB president the need to make substantial savings on the bank debt owed by Anglo and Irish Nationwide, Mr McGrath said.

“Otherwise, it will make the task of convincing the Irish people of the need for the measures in the upcoming budgets all the more difficult.”

He added that Mr Kenny “quite incredibly” did not “even put the issue of securing savings on this bank debt on the table during the European summit meetings of last Sunday and Wednesday”.

Minister for Finance Michael Noonan said last week however that “the concentration” of talks at the summit was not on Ireland and it was therefore not the time to raise the issue of promissory notes.

Sinn Féin and Fianna Fáil have repeatedly criticised the Government’s refusal to seek reductions in the State debt burden.

Mr McGrath said yesterday there was a “fundamental issue of equity in the EU at stake here”. Greece was being granted a haircut of 50 per cent of its sovereign debt held by European banks while the ECB “is attempting to force Ireland to repay in full unsecured, unguaranteed bonds owed by failed Irish banks currently being wound up”.

He said a 50 per cent reduction in the bond would save Ireland more than €350 million.

Mr Noonan, however, has insisted that Ireland “is not Greece”. He said last week Ireland’s interests would not be served by imposing a haircut on bondholders.

Stressing that the Republic’s was a north European economy rather than a “displaced Mediterranean” one in the north Atlantic, he said the best case scenario for Greece was another 10 years of austerity.

Mr McGrath highlighted promises by Tánaiste Eamon Gilmore before the general election that it would be “Labour’s way, not Frankfurt’s way” and Fine Gael claims that the banks would not get any further funding unless senior bondholders shared the losses.

“Instead, it now appears certain that the €36 billion of unguaranteed bank bonds in the system when Fine Gael and Labour came to office will be repaid in their entirety, with no losses whatsoever imposed.”

The People’s Movement has also criticised the Government’s commitment to pay bondholders in full. In a statement, it said the payment “is yet another instalment of a programme of sacrifices demanded of the people of this country as their contribution to saving the euro”.

There was a need for a “real debate in this country about the alternatives to the now discredited line pushed for decades by this countries euro-federalists and euro fanatics”, it said.