Tuesday 24 October 2017

Euro chief signals debt deal is unlikely

No deal: Jeroen Dijsselbloem
No deal: Jeroen Dijsselbloem

Peter Flanagan and Colm Kelpie

ONE of Europe's most influential finance ministers has signalled Ireland won't get a new deal on its crippling bank debt.

Jeroen Dijsselbloem, who chairs the 17-strong group of eurozone finance ministers, predicted little political support for using Europe's bailout pot to pay for bank debt from the past.

Some €64bn of taxpayers' money has already been pumped into Irish banks.

The Dutch finance minister said so-called 'retroactive recapitalisation' would sap the €60bn European Stability Mechanism (ESM) bank fund.

"Any requests for retroactivity will soon use up the fund. It would mean a massive claim on the ESM," Mr Dijsselbloem said.

"I don't see enough political support for it generally."

The €500bn ESM is to be used as a safety net for the troubled euro currency, but only €60bn has been set aside for bank recapitalisation.

Mr Dijsselbloem's comments cast doubt on hopes that Ireland, Greece or Spain would be able to tap the fund.

UNIQUE

Finance Minister Michael Noonan has said that Ireland will argue that it is a unique case. But he admitted it would be a long and slow campaign.

Mr Dijsselbloem's comments highlight the depth of opposition within Europe to the ESM being used retroactively.

Germany and other creditor countries, including Holland, are known to oppose the bailout fund being used in this way.

Last month, German Finance Minister Wolfgang Schauble said there was "no great leeway" for such a deal.

European leaders originally signed off on the idea of the ESM being used retroactively more than a year ago, but since then the deadline for making a decision on what that actually means has been pushed out further and further.

European finance ministers agreed at a meeting in June to consider applications for using the ESM on a "case-by-case" basis.

Irish Independent

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