We have no choice but to pay back the €700m Anglo bond, says Dukes
Published 02/11/2011 | 05:00
THE country has no choice but to pay back the €700m which falls due to Anglo bondholders today, the Chairman of the Irish Bank Resolution Corporation (IBRC) - the former Anglo-Irish Bank - Mr Alan Dukes said today.
The former Minister for Finance said the payment had to go ahead as the bank and the bondholders had entered into a valid commercial agreement for the bonds which were issued on November 2, 2006.
He pointed out that there would be serious implications for the banks if the country defaulted on this payment.
And the Taoiseach Enda Kenny claimed that such a course of action would also have serious implications for further investment in this country.
Finance Minister Michael Noonan today accused the last government of making a disastrous arrangement and compounded it by nationalising Anglo. Speaking on RTE's Morning Ireland, he said: "I'm not at all happy about it. Taxpayer has no liability and the only way out now is to act in consultation with the European Central bank."
However many of the opposition Dail Deputies have called on the government to contact the European Central Bank and to halt the payments.
Mr Dukes said he understood how people could be upset about having to make today's payments and warned that there was another €1 billion due to bondholders next January.
"According to all rules of the market, the repayments have to be made," he explained, adding that .the undertaking was that this would be the case and today is the due date.
He claimed it was a situation we had not been in before and it would cost serious difficulties for our banks and for others if we did not comply. "We have to live up to commercial contracts."
Mr Dukes refused to comment on whether the government could have got a better deal from Europe. "We have to meet our obligations," he said.