Ross claims bank deal 'disappearing'

THE TAOISEACH has rejected claims that Ireland’s EU deal on bank debt is “disappearing”.

Independent TD Shane Ross claimed yesterday that Ireland suffered “humiliation” at a meeting on Monday of EU finance ministers because bank debt “did not even make it on to the agenda”.

However, insisting “it is not disappearing”, Enda Kenny said it was “the subject of intense and ongoing discussions and negotiations”.

The Taoiseach said the issue had direct implications for Spain and a number of other countries and “work is proceeding on that”.

Mr Kenny said he had made it “perfectly clear” to EU president Herman Van Rompuy that the decision to break the link between sovereign and bank debt in Ireland’s case “is not about some problem that will arise for Ireland in the future. I said the problem is here now, having been caused by issues of the past.”

He said it had “direct implications” for Spain and a number of other countries. The facility to recapitalise banks directly was “intrinsically tied up with the decision to have a banking union capacity brought forward”.

Mr Ross said the meeting of finance ministers was “something of a triumph for Europe” because of the launch of the European Stability Mechanism. He asked, however, because of the failure of the bank debt issue to be raised, it was a “phantom bank deal we are encountering”.

The Dublin South TD suggested the breakthrough in June was now a non-event in Europe, in reference to the deal by EU leaders on bank debt to include Ireland.

He pointed to remarks by Klaus Regling, chief executive of the financial bailout fund, about “legacy debt” that “this point has not even been discussed in any European body so far”.

Mr Ross asked “is the deal down the tubes?” He suggested the Anglo-Irish promissory note and the recapitalisation of AIB and Bank of Ireland were “hitting the buffers”.

Mr Kenny said some progress had been made on the Anglo-Irish promissory note payment due in March this year. The next payment was due in March 2013, “but our clear objective and wish is that this might be concluded before the end of the year”.