A senior Government minister has raised expectations that Ireland may achieve concessions from Europe on loans used to meet the losses at Anglo Irish Bank in excess of the €700 million paid out this week to the failed bank’s bondholders.
Minister for Communications and Energy Pat Rabbitte said giving the go-ahead for the payment had been an “excruciatingly difficult decision” for the Government.
Having done that, he said he expected a quid pro quo from Europe to Ireland in the short to medium term.
“It was a requirement of the European Central Bank. The Minister for Finance did his best to get out from under that.”
“The ECB was trenchant. It is providing the blood transfusion that is maintaining our economy.
He said the concession may come through renegotiation of the promissory note of €30.8 billion for Anglo Irish Bank and the interest on that sum which will rise to an additional €17 billion.
“What would have been gained from a haircut in this particular bond would have been negligible in the context of ECB funding and in terms of our expectation of what we can achieve in our ongoing negotiations,” Mr Rabbitte told RTÉ Radio today.
He said given the burden of private debt that had been imposed on the public purse, it would be reasonable for the Government to have an expectation of a quid pro quo in the short or medium term.
Asked what kind of reductions the Government would seek, he did not specify a sum but said: “There’s €30.8 billion committed to promissory notes.
“That’s about €3.2 billion per annum for 10 years. That’s a horrific burden on top of
fiscal adjustment. The Minister for Finance is focused on that. He has put proposals to institutions in Europe; Frankfurt [where the ECB has its HQ] is well aware.”
“With the burden of private debt imposed on us, it is not unreasonable to expect that there will be an alleviation coming elsewhere,” he said.