The other guys blinked first
In the staring match between Ireland and the EU and the ECB, the other guys blinked first. Yesterday's announcement by Finance Minister Michael Noonan that Ireland would not have to make a cash payment on the €3.1bn tranche of the Anglo promissory notes due to be paid tomorrow represents a significant triumph for the Government.
Who now remembers Tanaiste Eamon Gilmore's fighting talk of it being "Labour's way or Frankfurt's way" during last year's general election campaign? However, 13 months later this government has made considerable progress in reversing some of the most objectionable features of the November 2010 EU/IMF bailout.
While reducing the interest rate on the EU portion of the bailout represented a major step forward, that achievement was never going to be fully recognised until progress had been made on the thorny issue of Irish bank debt. As things stand, the Irish taxpayer is being expected to pick up the full €64bn tab for bailing out the Irish banks. This is despite this country being forced to repay more than €70bn of senior bank debt, much of it to British and mainland European banks, at par.