Gilmore calls for debt deal at Chile gathering

Tánaiste Eamon Gilmore has taken Ireland’s campaign for a renegotiation of its bank debt to South America, arguing for an “appropriate agreement with the European Central Bank” at a gathering of EU and Latin American leaders in Chile.

Mr Gilmore said yesterday such a deal was necessary to bring about a “post-crisis Ireland”. He was speaking at a business forum as part of this weekend’s summit of EU leaders and their colleagues from the Community of Latin American and Caribbean States (Celac) in Santiago.

The comments form part of the latest diplomatic offensive by the Government to convince its EU partners to renegotiate the State’s bank debt.

Addressing several hundred European and Latin American businesspeople, the Tánaiste said Ireland “was turning a corner . . . we are becoming a good news story”, but progress in regaining financial stability and competitiveness needed to be complemented with a deal to make Irish debt “more sustainable”.

Over the weekend, the first gathering of EU leaders during the Irish presidency of the bloc, the Tánaiste will meet German chancellor Angela Merkel and hold bilateral talks with the prime ministers of France and Finland as well as Chilean president Sebastián Piñera.

Finnish prime minister Jyrki Katainen has emerged as a hard-line opponent among Ireland’s euro zone creditors of Dublin’s request to have the recapitalisations of AIB and Bank of Ireland retroactively funded by the European Stability Mechanism (ESM). He has described as “inappropriate” the Irish campaign for a special deal on banking debt, insisting legacy debts “are, above all, a problem of the Irish Government”.

Finnish opposition

An Irish official said Mr Gilmore would raise Finland’s opposition to the retroactive use of the ESM for the AIB and Bank of Ireland capitalisations during his meeting with Mr Katainen today.

Mr Gilmore is set to return to the need for a deal on Ireland’s debt in a second speech before leaders attending the summit tomorrow. He will also lobby for a deal on the €30.6 billion promissory note from the ECB, which was used to stabilise Anglo Irish Bank and Irish Nationwide in 2010.

The Government is seeking to extend the life of the 10-year note to reduce the €3.1 billion annual repayments.

Even though the euro zone debt crisis has followed the bloc’s leadership to Santiago, the EU leaders are seeking to use the summit to convince their Latin counterparts that the crisis has been contained.

They will also be lobbying for the revival of moribund trade talks between the bloc and its South American counterpart, Mercosur, the Brazilian-dominated customs union that is the biggest component of Celac.

The EU has targeted boosting exports to emerging regions such as Latin America and the Caribbean as key to helping drag the bloc out of recession.