Noonan bids to restructure €3bn-a-year Anglo handouts
THE Government is exploring ways to restructure its €3bn-a-year payments to Anglo Irish Bank -- and has already raised the issue with the bailout troika.
Finance Minister Michael Noonan yesterday confirmed the effort around the promissory note, but stressed that no action would be taken if it damaged the bank's capital.
Mr Noonan also confirmed that he was still hoping to force losses on Anglo's senior bondholders and would raise the issue with senior ECB officials at a finance ministers meeting in mid-September.
The comments came in a wide-ranging appearance before the Finance Committee yesterday morning, as the minister faced a grilling from more than 20 TDs and senators.
Asked about the sustainability of handing out €3bn a year to Anglo over a 10-year period, Mr Noonan revealed that the State had already begun exploring ways to reschedule the payments.
The situation is complicated because rescheduling in today's environment could mean upping the interest rate, which could create "a capital hole in Anglo again".
"We haven't raised it with the authorities yet in specific terms, but we have pointed out in general terms to the troika the difficulties that come up paying it," he said.
"We don't want to just kick it around, we want to go to Europe with a proposition."
Mr Noonan stressed, however, that the Government wouldn't proceed with any rescheduling if it meant Anglo would have to come back to the taxpayer for more cash -- "if that's the price for restructuring the promissory note, I'll stick with the promissory note [as it is]".
Mr Noonan also used his committee appearance to re-iterate his determination to get the ECB to change its stance on not forcing losses on Anglo senior bondholders.
The Finance Minister insisted he would raise the issue with the ECB again, ideally with ECB President Jean-Claude Trichet who is likely to attend a meeting of European finance ministers in mid-September.
The ECB has grown increasingly weary with Ireland's insistence on revisiting the issue, but Mr Noonan yesterday insisted he had "helped" Ireland's cause by his persistence.
"What I said in the US [about burning senior bondholders] wasn't a flight of fancy," he said. "It helped in the re-negotiation of Ireland's bailout terms.
"It showed we were willing to fight our corner, that continues to help us."
A spokesman for the ECB yesterday declined to comment.
He also declined to comment on Mr Noonan's assertion that the ECB's programme on buying sovereign bonds on the secondary market was "quantitative easing" -- economic jargon for printing more money.
Mr Trichet has repeatedly insisted the bond-buying programme is not quantitative easing as it is "sterilised" by other aspects of the ECB's operations.