independent

Sunday 20 April 2014

Bruton says debt deal unlikely before German elections

JOHN Bruton does not believe Ireland will get any EU deal on bank debt until after the German elections.

The former Taoiseach and EU ambassador to the US said the crucial date this year would be September, when Chancellor Angela Merkel seeks re-election, and he saw no movement on burden sharing until after the vote.

His comments come after European Commission President Jose Manuel Barroso failed to back Taoiseach Enda Kenny's deadline for a bank-debt deal.

Mr Kenny has set a June deadline for a clear signal on the EU reducing the burden of debt from recapitalising AIB, Bank of Ireland and Permanent TSB.

This is separate to the March deadline for an agreement on the Anglo Irish Bank debt. However, Mr Barroso refused to speculate on whether a deal would be done by the summer.

There are genuine fears within government circles that no major progress will be achieved on bank debt until after the German elections.

Despite being confident that the Government will secure a deal on Anglo by March, Mr Kenny admitted that not securing one would make it hard to exit the bailout.

He declined to say what the Coalition's back-up plan would be if no deal was struck on the €30bn promissory note with the European Central Bank, but did say the talks were taking so long because the negotiations were "very complex".

"I am confident we will see a deal before the end of March, which is when the next repayment is due," he said.

Irish Independent

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