A CRUCIAL deal to ease our crippling bank debt by billions of euro hangs in the balance as the Government scrambles to salvage an agreement with the European Central Bank.
The Coalition was left red-faced when yet another promised deal on Anglo bank debt dramatically stalled at the eleventh hour.
Amid scenes of confusion and farce, TDs attended a Dail sitting that lasted into the early hours to pass the emergency laws linked to the deal being hammered out with the ECB.
President Michael D Higgins made a dash back to Dublin on the state jet to be able to sign it into law. It came as talks continued in Frankfurt in a last-ditch attempt to seal a deal that could ultimately save the taxpayer up to €2bn a year and finally draw a line under the banking crisis.
The taxpayer is currently paying €3bn a year to cover interest and repayments on €30bn promissory notes that were given to Anglo to keep it afloat. The latest instalment was due to be paid at the end of March.
A key component of the deal focused on swapping the 10-year note for longer term loans – some of which would not be repaid for up to 40 years.
On average, the debt would be repaid over 27 years.
A longer repayment period would mean the State has only to pay interest, which is expected to come to around €1bn a year – hence saving the taxpayer €2bn.
However, in a last-minute U-turn, some European Central Bank policymakers demanded more time to weigh the proposal presented by Ireland.
Some of the European central bankers were concerned that the Irish proposal could set a precedent, as other countries such as Greece and Portugal would try to get a similar deal.
In a surprise move, the deal also included the liquidation of Anglo Irish Bank and transfer of its loans – many of them in trouble – to the National Asset Management Agency (NAMA).
Government sources pointed the finger of blame at Frankfurt for leaking details of the plan, which led to the liquidation having to go ahead before the deal was done
A flurry of activity went on in Government Buildings and Leinster House as the Coalition attempted to put together the make-or-break deal on bank debt.
But the saga reached farcical levels not seen since the dying days of the Fianna Fail-Green Party government, with government and opposition TDs complaining about being kept in the dark.
And cabinet ministers were also told to await an emergency meeting. There were several possible reasons for the urgency:
• To prepare for a possible deal later today.
• To prevent bond holders from pulling out of the bank.
• To pre-empt a judgment in the Supreme Court today.
The Government brought emergency legislation before the Dail to deal with the former Anglo Irish Bank.
The Irish Bank Resolution Bill 2013 provides for the orderly winding up of the affairs of IBRC to address the continuing serious disturbance in the economy of the State.
The 59-page bill with 25 section says the IBRC is no longer necessary to support the financial stability of the state or the stability of the Irish financial system.
Mr Kenny said it was needed for the protection of between €12bn and €14bn of assets. "Not dealing with this would leave potential liabilities of up to €40bn," he said.
In a dramatic day, the board and staff of Anglo Irish Bank were told that a liquidator – KMPG – was being appointed to the bank.
The board was stood down in late afternoon when Padraig Monaghan of KPMG was appointed to take control of the board.
Staff were informed by an email at the close of business that a liquidator was now involved and asked to hand in their security passes.
The European Governing Council met last night, where the governor of the Irish Central Bank Patrick Honohan tabled the proposal.
Just after 8.30pm, government chief whip Paul Kehoe gave the first official confirmation that the Government was in negotiations with the ECB over a new deal.
Government sources claimed the plan, if accepted by the ECB, would be "very advantageous" for Ireland.
However, Fianna Fail said it remained sceptical of the success of any deal.