Kenny and Gilmore deny tensions over bank deal

Taoiseach Enda Kenny and Tánaiste Eamon Gilmore have denied there are tensions within the Government in the wake of deeply contrasting comments from Fine Gael and Labour on the implications of failure to reach a deal on the promissory note.

Labour Ministers, including the Tánaiste, have portrayed securing an agreement with the European Central Bank on easing the punitive terms of the note as absolutely critical for the future of the Government.

The next annual repayment of €3.1 billion of the €30 billion debt incurred in order to shore up the former Anglo Irish Bank falls due on March 31st.

Yesterday Mr Gilmore refused to confirm or deny if he told European leaders in private last week that the Coalition might collapse in the event of a deal not being reached.

Asked in Brussels about reports he had privately voiced the warning to German chancellor Angela Merkel, commission president José Manuel Barroso and council president Herman Van Rompuy during a recent EU Latin America summit, Mr Gilmore would only say: “The future of the Irish Government is a matter for the Irish Government and the Irish people.”

A senior Government source said the the details of a private meeting could not be divulged but pointed to recent comments made by the Tánaiste on the matter, including his description of the “catastrophic” consequences of a failure.

“[Mr Gilmore] has very clearly and publicly stated that nobody should underestimate the importance of getting a deal on this,” said the source.

In contrast, Fine Gael has adopted a low-key approach to the negotiations with the Frankfurt-based bank, with its most senior Ministers downplaying any threat to the survival of the two-year old Coalition.

Minister for Finance Michael Noonan yesterday dismissed the possibility, saying the negotiations were not linked to any question on the survival of the Coalition. “I don’t put the two issues together at all and I don’t see any threat to the coalition Government,” he said in Limerick.

In comments seen in some quarters as directed at recent noises from Labour, he said there was no payment on the promissory note due until March 31st. “I don’t understand why people are getting so excited about it at present with two months to go.” The Taoiseach, in Leuven, Belgium, yesterday, also dismissed suggestions of tension between the partners.