Taoiseach tells Merkel allies deal on Irish bank debt would not set precedent

 

Against a backdrop of snowy mountains and picturesque buildings, Taoiseach Enda Kenny yesterday told an important group of politicians in Bavaria that a deal on bank legacy debt would be a one-off for Ireland and would not set a precedent.

He visited the Alpine retreat to talk to the Christian Social Union (CSU), Angela Merkel’s rebellious Bavarian allies, to explain why Ireland wants to cash in its “special case” understanding with Germany for a more concrete deal on bank debt.

Solidarity

Ireland had honoured solidarity shown it by EU partners by adhering to its EU-IMF programme, he said.

“This is my first time in Bavaria,” he said yesterday morning, adding his name to a long list of illustrious Irish visitors to the region. Stretching back to the fifth century, the best known is Cavan-born monk Cillian, who converted locals to Christianity until he crossed a local noble woman in AD 689 and was beheaded.

Wildbad Kreuth is notorious for political intrigue – the last CSU leader was deposed here. But the only knives flashed during Mr Kenny’s visit were to carve the suckling pig and Sauerbraten marinated beef during a welcome banquet, as a local brass band added a harp and Irish tunes to their repertoire.

Ireland has been long close to Bavarian hearts, even in recent difficult years, but few are aware of the real cost of austerity measures or the challenges yet to be faced.

Mr Kenny rectified this, facing CSU officials and 44 Bundestag deputies yesterday morning. Seated in three long rows in an airless room, the former primary school teacher was in his element.

Mr Kenny insisted it was important to show Irish citizens, whom he said had demonstrated “extraordinary patience” with reforms, that a promised decision would be delivered on bank legacy debt.

This was key to Ireland exiting its programme, he told them, and guaranteeing Europe a good news story. He reiterated that point, he said, in a phone call with Chancellor Angela Merkel on Monday night.

“Solidarity is not a one-way street and funding countries giving assistance to Ireland are not doing so in vain,” said Mr Kenny after yesterday’s talks. “As it is a two-way street, support agreed to by Europe needs to be followed through to ensure our exit from our programme.”

Additional measures

CSU officials declined to comment in detail on ongoing bank debt talks, though CSU leader Horst Seehofer said it was important to agree “the necessary additional measures to ensure reform success”.

“As long as they stick to their reform path, it’s justified to support boosting jobs and growth,” he said.

Despite this goodwill to Ireland, Bavarian politicians – facing twin federal and state elections – are wary of any deal for Ireland that would set a precedent in other countries.

But, considering the CSU love of railing against bailouts in general, the fact that the party resisted that temptation yesterday was significant.

“We have great respect for what Ireland has done in this programme,” said Gerda Hasselfeldt, CSU Bundestag leader. “Our aim isn’t to boss anyone around but to restore the economic competitiveness.”