Taoiseach stresses need for debt deal

Taoiseach Enda Kenny has warned that Ireland will have difficulty returning to financial markets unless there is a deal on the €28.5 billion bill for the promissory notes used to bail out the failed Anglo Irish Bank.

Mr Kenny said a re-engineering of the promissory notes for the Irish Bank Resolution Corporation (IBRC), as Anglo is now known, was very important.

“A deal on this would certainly make it so much easier for Ireland, and enhance our ability to get back there . Not having a deal on the promissory note would make it so much more difficult,” he said.

He said it was a Government priority to bring about action on the bank debt due to the burden it was placing on the Irish economy. “It will be absolutely crucial for confidence in our own economy here and will also help unblock credit for businesses and for investment directly into the economy.”

Long-term deal

The Taoiseach reiterated the Government’s desire to re-engineer the IBRC promissory note by March so that “it would change from being a very special overdraft agreed to be paid down quickly to a much cheaper longer-term loan”.

He said that by June he expected agreement on reducing the bank debt burden.

Mr Kenny said Ireland wanted to be able to exit the EU-IMF programme in 2013. That would be a demonstration to other European countries that when people work with their government and adhere to conditions they can actually exit a programme.

“I think that is the important message for other European countries who look to Ireland now as the leading contender to be able to emerge from a programme. That is an important signal to be able to send out.” he said.

Mr Kenny said he hoped Ireland’s EU presidency over the next six months would be one of the solutions, not least when it comes to finalising a seven-year EU budget in February.

Ireland agenda

He said the presidency would not stop him pushing Ireland’s agenda, and he hoped to gain some certainty as to whether Irish banks could be retroactively recapitalised when Europe is able to use rescue funds to shore up struggling lenders in 2014.

“I’m glad that the supervisory mechanism has been put in place. While that may not be concluded by the end of 2013, that does not preclude the question of the definition of legacy assets being put on the table.”

Mr Kenny said there were signs that confidence was returning to the country, pointing to recent fundraising by banks and modest economic growth.

The Taoiseach added, however, that with unemployment “unacceptably” high at over 14 per cent and many families facing difficulties, he had to remind colleagues how fragile Ireland’s position still was.