Proposals to cut €30bn Anglo burden 'might take months'
Published 25/02/2012 | 05:00
A KEENLY awaited "technical paper" showing how to lessen the burden of Anglo Irish Bank's €30bn bailout is highly unlikely to be delivered next week in line with the Government's original "end of February" deadline.
Sources last night said there was significant further work to be done on the proposals and that "incremental" approval from political stakeholders had to be gotten as the proposals were developed.
In that context, it is extremely unlikely that experts from the International Monetary Fund, European Commission and European Central Bank will be in a position to publish proposals by next Wednesday.
Some suggested it might be "months" before proposals were announced, implying that Ireland will have to honour the €3.1bn payment due on Anglo's bailout at the end of March.
Finance Minister Michael Noonan asked the so-called troika to prepare the technical paper when they came to Dublin for the January review mission of Ireland's bailout programme.
At a press briefing to mark the end of their visit, Mr Noonan said he hoped the document would be completed by "the end of February".
Since then he has shied away from reaffirming the end of February date, and his spokesman last night said there were "no set deadlines".
The Irish Independent understands that discussions on the technical paper are "progressing", but that there is still significant work to do on several aspects of the potential plan.
The main task is trying to ease the €3.1bn-a-year burden on the State that comes from repaying a €30bn IOU used to bail out Anglo Irish Bank and Irish Nationwide (now collectively Irish Bank Resolution Corporation).
But the "enhancement" to the bailout programme is also likely to include a plan to resolve the uncertain future of Permanent TSB and deal with the issue of unprofitable tracker mortgages that are weighing down bailed-out banks.
The plan is likely to need to be ratified by the EU's member states, since it is likely to demand support from Europe's bailout fund.
The European Central Bank's Governing Council will also have to approve any proposals since the ECB allows the Central Bank of Ireland to fund IBRC.
Mr Noonan has admitted that getting those political approvals "won't happen in the short term".
Some people had expected the technical report to be published imminently, and the political work to happen after that.
Sources this week said that the political and technical elements of the work couldn't be separated that simply.
The process needs "incremental" political approval, since it makes sense to establish political support for broad concepts before they are developed into fully fledged proposals.