Thursday 30 October 2014

Taoiseach to renew push for debt deal during Merkel visit

Fionnan Sheahan Group Political Editor

Published 06/03/2014 | 02:30

Angela Merkel will meet Enda Kenny in Dubin tomorrow
Angela Merkel will meet Enda Kenny in Dubin tomorrow

TAOISEACH Enda Kenny will again push for the promise of a legacy bank debt deal to be fulfilled when he holds talks with German Chancellor Angela Merkel tomorrow.

Ms Merkel is in Dublin for a conference hosted by Fine Gael's EU grouping – the European People's Party (EPP).

Almost two years after EU leaders specifically included Ireland in a commitment to separate bank debt and sovereign debt, the Government is still awaiting delivery on the apparent promise of retrospective bank recapitalisation.

But the crisis in Ukraine will dominate the EPP gathering.

EU leaders, including Mr Kenny and Ms Merkel, will meet in Brussels today for an emergency meeting on the standoff with Russia.

Afterwards, the 12 EU leaders who are members of the EPP will travel to Dublin.

At the EPP Congress tonight, all the party leaders present will hold a meeting on Ukraine with Ukraine's Prime Minister Arseniy Yatsenyuk and party leaders, Vitaly Klitschko and Yulia Tymoshenko attending.

But Mr Kenny will hold a special meeting with Ms Merkel at Government Buildings tomorrow, where he will again bring up the debt deal.

The deal has been held up by the time taken to set up an EU single banking supervisor.

TROUBLE

The Government wants to see the new EU bailout fund, the European Stability Mechanism, being able to help recapitalise banks that ran into trouble in the past.

"There's never an opportunity where it is passed up. I can't imagine the bilateral will pass without a conversation on it," a government source said.

"The Taoiseach has consistently said you have to follow through on decisions."

The Coalition is continuing to press for the debt deal as part of a package of measures to ease the burden in the wake of the bailout by the taxpayer of the banking system.

The Government secured a deal last year to stretch out the repayment of the €25bn bill for bailing out Anglo Irish Bank for up to 40 years.

But it has been pushing Europe to get a refund on the remaining €32bn of taxpayers' money that went into AIB, Bank of Ireland and Permanent TSB.

The latest push for a bank debt deal comes just days after two billionaire investors tripled their money following an audacious bet on BoI shares.

US-based Wilbur Ross and Canada's Prem Watsa slashed their stake in the Irish bank by a third yesterday, selling a 6.4pc holding for around €690m.

It's more than the €600m the pair paid for three times that size of shareholding in 2011 – and leaves them with a 12pc stake in Bank of Ireland worth a cool €1.2bn based on this week's trading price.

Shares bought for 10 cents each in 2011 were sold for just under 33 cents in yesterday's deal. The huge windfall for the investors has sparked debate about whether the Government allowed Bank of Ireland to be sold too cheap in 2011.

Seeing successful investors cut their stake will also prompt speculation that the time may be ripe for Finance Minister Michael Noonan to sell some of the taxpayers' 14pc stake in the bank – which has also tripled in value since 2011.

Mr Kenny rejected calls from Independent TD Seamus Healy to sack Mr Noonan yesterday.

Speaking in the Dail, Mr Healy attacked what he called the "ripping off" of the Irish people, referring to Mr Ross as a "vulture capitalist".

Irish Independent

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