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Monday 24 July 2017

Kenny denies U-turn over bailout interest rates

The Government has flatly denied a U-turn on efforts to secure a new interest rate deal on bailout loans.

Ahead of a summit of European leaders in Brussels and with the debate suddenly off the agenda, Taoiseach Enda Kenny said he wanted to see analysis of stress tests on the banks first.

"From an Irish point of view I prefer to deal with substance rather than theory and from that perspective I would like to have a much clearer picture of the outcome of the bank stress tests which are going on," he said.

It had been understood the two-day summit - where earthquake-hit Japan, war-torn Libya and the economic and political crisis in Portugal is on the agenda - would be a key moment in the Government's push to secure cheaper loans from Europe.

The next opportunity for crucial negotiations on the €85bn EU/IMF loans would be in two weeks' time when finance ministers meet in Hungary.

The Government is already under pressure from French President Nicolas Sarkozy and German Chancellor Angela Merkel - who is facing elections on Sunday - to increase corporation tax in return for an easing of interest rates.

The Taoiseach has insisted that is non-negotiable.

In Dublin Tanaiste Eamon Gilmore dismissed accusations of an about-face by the Government ahead of the Brussels summit.

"There is no U-turn," the Labour leader told the Dail.

"I'm sure that every member of this house will support the Taoiseach in the work that he is undertaking today and tomorrow on behalf of this country."

Results of the bank stress tests, which should show the full financial damage done by the property crash and downturn, will not be known until next week.

Sinn Fein president Gerry Adams accused the Taoiseach of not standing up for Ireland after the interest rate debate was taken off the summit agenda.

"The real issue that should be discussed at this EU Summit meeting is Ireland's inability to repay this loan and our inability to sustain the debt," Mr Adams said.

Joe Higgins, Socialist Party TD, claimed the Taoiseach was in "full flight from the wrath of Angela Merkel" and branded it a pathetic capitulation.

The EU/IMF bailout arrangement earmarked €10bn to be pumped into the banks in a recapitalisation drive and a separate €25bn contingency fund.

The Brussels summit of EU leaders continues tomorrow.



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