News Analysis

Saturday 30 August 2014

John Downing: Yes, EU presidency was successful but tapes blow is serious

John Downing

Published 29/06/2013 | 05:00

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Foreign Minister  Eamon Gilmore, European Parliament President Martin Schulz and Taoiseach Enda Kenny attend a meeting on the Multiannual Financial Framework in Brussels.
Foreign Minister Eamon Gilmore, European Parliament President Martin Schulz and Taoiseach Enda Kenny attend a meeting on the Multiannual Financial Framework in Brussels.

IN sporting parlance, the Government has pulled a goal back – but there is a long way to go before the damage done by the Anglo Tapes can be redressed.

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Tanaiste Eamon Gilmore brokered a compromise deal on the EU's seven-year €90bn budget. It was an unexpected win and crowns a successful six-month EU Irish presidency, during which there was also progress on EU banking rules, deals on fishery and farming policies and the launch of new trade talks with the US.

Ireland's stint ends at midnight tomorrow and Lithuania's begins. It is worth acknowledging a solid job of diplomatic work well done.

A successful EU presidency may be beneficial in future Brussels negotiations – in more ordinary times it might even help on legacy bank debt, for example.

But even before the Taoiseach headed to Brussels for a crucial EU summit, government members were frank about the reputational damage done to Ireland by those taped conversations.

On Wednesday, Mr Gilmore suggested that if the tape disclosures had been made earlier this year, at a critical stage of the Government's negotiations with the ECB on the Anglo promissory note, the outcome may have been very different. "I think coverage of this kind does do damage to our international reputation," he said.

Finance Minister Michael Noonan was of the same view. "I've no doubt at all it would influence public opinion in the countries that provide us with the funds that are needed for our bailout programme," he said.

He saw it as potentially reversing more than two years of hard work.

The clear implication is that Anglo has further undermined the Government's big prize – a new deal on €30bn-plus on other bank debts. Precisely 12 months ago, on Friday, June 29, the Taoiseach trumpeted a major breakthrough for Ireland on bank debt.

The low-key language in the EU summit conclusions, which spoke of "examining the situation of the Irish financial sector with a view of improving the sustainability of the well-performing adjustment programme", held out hope that real help was at hand. Since then, there have been two incremental but important concessions, effectively extending the repayments timescale, but the big prize of lightening the debt load has eluded the Government.

With German federal elections looming and victory looking likely for Chancellor Angela Merkel, there had been hope that Ireland could get things moving before the end of this year.

To date, Ireland's bank debt relief case has been largely based on "moral arguments" about taking the blows of carrying enormous bank debt to ultimately ensure the security of the euro, and being victims of 'cheap' Eurozone money that fuelled a phoney property boom. But the Anglo Tapes also depict the Government, the Central Bank and the Financial Regulator as failing abysmally to control the rampant Irish banks.

Any lingering doubt was dispelled late on Thursday when Mrs Merkel – who had all week avoided any public comment – was asked a direct question about the tapes. We hardly need recall that the extracts included a rendition of 'Deutschland, Deutschland, Uber Alles'.

She reflected on the difficulties ordinary people faced in working and paying bills and taxes and "who even show solidarity with others" through various forms of aid.

"I cannot but express my contempt at this," she said.

Ireland's case for special help on legacy bank debt has been dealt a very serious blow.

Irish Independent

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