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Thursday 19 January 2017

Noonan warns EU: I won't let Greek plan ruin Ireland

Minister warns EU over Greek deal's consequences for Ireland

Donal O'Donovan in Luxembourg

Published 20/06/2011 | 07:07

FINANCE Minister Michael Noonan has warned fellow European ministers he will not tolerate any financial rescue plan for Greece that threatens Irish interests.

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Mr Noonan arrived in Luxembourg last night for emergency talks between euro-area finance ministers on how to end the Greek debt crisis.

"The primary Irish interest here is to ensure any solution which is put in place doesn't contain elements which would affect us adversely," he said.

"We'll certainly be saying no contagion for Ireland, regardless of what the provisions are."

Mr Noonan's comments signal that Ireland will try to block any measure being imposed on Greece that could become a template for tough action against Ireland -- should we require a second bailout.

"It'll depend on the measures that are put in place, but in very simple language, we don't want any knock-on effects from the Greek deal which would work against Ireland's interests; and I think, so far, that is not going to happen," he added.

There is also a real risk to the State's credit rating.

Ratings agencies have warned that any deal that hurts lenders to Greece will be considered the equivalent of a default by the government of Greece.

This, in turn, would lead to a ratings downgrade for Ireland.

Ireland has already suffered a series of downgrades which

has made us reliant on the €67bn IMF-EU bailout for financial survival.

Any new shock in Greece will reduce Ireland from "investment-grade" rating status to "junk" -- and end hopes of gradually returning to the markets to borrow money over the next two years.

Mr Noonan also said he had not been in contact with the European Central Bank (ECB) amid reports that the bank was furious with his proposal to burn senior bondholders in Anglo Irish Bank and Irish Nationwide -- and with the timing of his comments last week in the context of the current Greek crisis. "We've certainly had no direct contact at all which would suggest there was any veracity in that," Mr Noonan said.

Tanaiste Eamon Gilmore last night backed up the Finance Minister by saying that he had been stating the "settled policy of this Government" when he made the proposal in Washington.

"That is that we want to minimise the burden that the Irish taxpayer has to bear for the losses of the banks," Mr Gilmore said.

And he said the Government would continue its efforts to impose losses on senior bondholders in Anglo and Irish Nationwide, as well as campaigning for a cut in the interest rate on our bailout loans.

Taoiseach Enda Kenny will meet French President Nicolas Sarkozy at the EU's European Council meeting in Brussels on Thursday and Friday. He will again attempt to persuade the French leader to drop his insistence on changes to our corporation tax rate in return for an interest-rate cut.

Last night's meeting of finance ministers in Luxembourg was the second emergency session in a week.

Mr Noonan said he did not believe a final agreement on Greece was imminent. "This is about commencing the process. I hope that over the next few weeks, by July 11, a full solution would be put in place which will be credible and long term," he said.

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