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Sunday 31 August 2014

Noonan not planning on making next €3.1bn Anglo bailout payment

Donal O'Donovan in Brussels

Published 13/12/2012 | 05:00

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FINANCE Minister Michael Noonan is not planning on making the €3.1bn Anglo Irish Bank payment in March.

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In Brussels, he said he believed a deal to cut the €3.1bn a year cost to the taxpayer of bailing out Anglo will be agreed before the next payment falls due in the spring.

But he said he had no plans to unilaterally cancel the payment.

His comments came during a meeting with other European finance ministers and will fuel the mounting speculation that a deal on the controversial Anglo Irish Bank "promissory note" is close to being reached, after more than 15 months of painstakingly slow negotiations.

The controversial March payment of €3.1bn to honour the Anglo "promissory note" has become a huge political issue.

Further progress was also made amongst the finance ministers, who are meeting in Brussels, towards the creation of a single European authority to supervise the banking sector.

Movement on this is important for Ireland because progress on the issue is regarded as essential before talks get under way in earnest on the second part of the hoped-for deal to cut the total €64bn cost of our banking bailout.

Once a banking supervisor is up and running, there will be scope for a deal on sharing the burden of rescuing our banks with the European rescue funds.

The ECB is blocking a deal on the €3.1bn Anglo payment because its president, Mario Draghi, fears that easing the terms would be regarded as "monetary financing" – essentially printing new money to get out of a tight spot.

Comments by the ECB president were seen as a signal to Mr Noonan that in order to break the deadlock on the issue, he must come up with a formula that convinces Mr Draghi that easing the terms of the Anglo promissory note is not the same as printing money.

Irish Independent

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