Promissory note statements irking ECB

Fellow Independent TDs gathering outside Leinster House yesterday to voice their support for Shane Ross's proposal on the promissory note issue. Mr Ross has called on the Government to declare it will not pay the €3.1 billion that is due next month. photograph: bryan o'brien

Fellow Independent TDs gathering outside Leinster House yesterday to voice their support for Shane Ross's proposal on the promissory note issue. Mr Ross has called on the Government to declare it will not pay the €3.1 billion that is due next month. photograph: bryan o'brien

 

The European Central Bank is becoming increasingly irritated with some of the Government’s public statements over Anglo Irish Bank as the Coalition steps up pressure for a deal to restructure its debts.

The ECB’s concern about the tenor of public remarks by some Government figures comes amid disquiet on the Fine Gael wing of the Coalition at some of the strident language on the Labour side.

With a deadline looming at the end of March for the next €3.1 billion Anglo repayment and considerable hurdles still to be cleared, efforts are now under way within the Government to calm down the rhetoric.

Tánaiste Eamon Gilmore declared 10 days ago that any failure to achieve a deal could be catastrophic for Ireland. He has declined to deny or confirm whether he told European leaders at a meeting in Chile that the Fine Gael-Labour administration could collapse if there is no deal.

Such statements have not gone down well within the EU-International Monetary Fund “troika”, of which the ECB is a member. “It’s with some irritation,” said an ECB source when asked how recent remarks from Government figures were viewed in Frankfurt.

The ECB closely guards its independence from political leaders and the central bank is refusing to back any recasting of the Anglo promissory note scheme which could be construed as it illegally printing money for a member state.

Refined proposal

A rebuff from the ECB two weeks ago has led the Government to refine its proposal. While the Irish question is expected to come up at a meeting tomorrow of the ECB governing council, a breakthrough is considered unlikely at this time.

On the margins of the talks between Dublin and the ECB, the argument is being made that it is unhelpful for Government figures to create artificial pressure to secure a deal.

The argument is also being made that it is unhelpful to constantly make in public statements on the Anglo debt while in the middle of a private negotiation to reduce the burden.

In spite of anxiety expressed publicly on the Labour side that any lack of a deal could compromise talks on a new Croke Park agreement, Minister for Finance Michael Noonan has kept up a confident stance.

The spokesman for Taoiseach Enda Kenny told reporters that Mr Noonan told Cabinet yesterday that the talks with the ECB are at the point he expected they would be at at this stage in the negotiation.

United front

Mr Kenny’s spokesman and Mr Gilmore’s spokeswoman maintained a united front, saying all members of the Government shared the same objective.

“Everybody is on the same page. We need a deal,” the Tánaiste’s spokeswoman said.

“Everyone is ad idem on this,” the Taoiseach’s spokesman said.

The Dáil debated a Private Members’ motion tabled by Independent TD Shane Ross – and backed by the technical group – calling on the Government to declare it will not pay the €3.1 billion due next month.

Speaking during the debate, Minister of State for Finance Brian Hayes said it would not be appropriate for him in any way to pre-empt the outcome of the discussions with the ECB, especially almost two months ahead of the next scheduled payment.

Mr Hayes said that, as a non-standard funding instrument, the IBRC promissory notes were inadequate, required by weekly approval for collateral purposes for the IBRC from the ECB.

“All parties to the current discussions could gain from an agreed approach to this issue,” he added.

“And it is in this context that the Irish Government has been working extremely hard to secure an agreement.”