Coalition using Trichet letter ‘to beat FF’ and not for leverage

Fianna Fáil finance spokesman Michael McGrath has said the Government could use the so-called Trichet letter for “leverage” but prefers to use it as a “stick to beat” his party.

Mr McGrath was referring to the letter from the then European Central Bank (ECB) president, Jean-Claude Trichet, to former finance minister Brian Lenihan in November 2010, which was published in The Irish Times today.

“It’s a very direct, very threatening letter from the ECB. It’s evidence that the ECB did over-step the mark and its mandate,” he said.

“I believe that we can use it [the letter] for leverage. The Government seem to be inclined to use it as a stick to beat Fianna Fáil.”

Mr McGrath said either Mr Trichet or the current ECB president Mario Draghi should attend the banking inquiry to account for the actions of the bank.

Speaking to reporters outside Leinster House this afternoon, Mr McGrath described the letter as a “direct threat by an European institution to a sovereign State” at a “vulnerable time” and said the ECB had cost Ireland billions of euro.

“The view in the ECB and Europe generally was that the emerging Eurozone crisis could be contained in Ireland,” he said.

Mr McGrath said there were clearly serious domestic problems in 2010. While they were being faced up to, Ireland was heading in the direction of needing external assistance.

“But what happened here was the ECB set the terms.” He described the bank as a powerful European institution which had exceeded its mandate.

The full story had yet to emerge, he added. He called on the ECB to publish all correspondence and contact it had with the Government.