Friday 15 December 2017

Revealed: Top-level talks with Troika weeks before bailout

Key Euro officials held meetings with Department of Finance mandarins as economy tanked

Former Secretary General of the Department of Finance, Kevin Cardiff. Inset: The Department of Finance security logs
Former Secretary General of the Department of Finance, Kevin Cardiff. Inset: The Department of Finance security logs
Black and white: The Department of Finance security log show senior European officials who would make up the Troika mission to Ireland visiting Kevin Cardiff, Department of Finance Secretary General, Assistant Secretary Michael McGrath, and banking mandarin Ann Nolan, on October 12, five weeks before the bailout was announced
IN BLACK AND WHITE: The Department of Finance security logs show senior European officials who would make up the troika mission to Ireland visiting Kevin Cardiff, Department of Finance Secretary General, Assistant Secretary Michael McGrath, and banking mandarin Ann Nolan, on October 12, five weeks before the bailout was announced
Nick Webb

Nick Webb

KEY officials from the ECB and the European Commission troika mission attended high-level meetings in the Department of Finance in the weeks before the dramatic €67.5bn bail out in November 2010.

These meetings -- a full five weeks before the bailout -- reveal for the first time the discussions between the principal players in what would become the Troika delegation and the Department of Finance ahead of the bailout.

Revelations of these meetings raise new questions over how Ireland ended up being forced into a bailout and why the Fianna Fail-led government continued to deny any talks were taking place before the State entered a rescue programme.

The Department of Finance has insisted that there were no discussions on a potential bailout "in advance".

The security logs at the Department of Finance South Block, which are stored in the underground safe in the department, were obtained by the Sunday Independent under the Freedom of Information Act, and reveal for the first time that the then Secretary General of the Department of Finance, Kevin Cardiff, and other senior civil servants met with key European and ECB officials who would form part of the Troika bailout team. Our exclusive camera phone images of the security logs clearly identify the names and signatures of the Eurocrats who would become core members of the Troika team supervising Ireland.

The security logs reveal that Mr Cardiff met with a representative of the ECB on October 12, 2010 -- five weeks before the official arrival of the bailout mission on November 18, 2010.

Istvan Szekely, who headed up the European Commission's Troika mission to Ireland, also held a meeting with senior Department of Finance official Ann Nolan on October 12, 2010. Nolan is one of the highest-ranking civil servants in the department, serving as an assistant secretary with responsibility for banking.

Edward O'Brien, an ECB expert on financial stability, met with senior Department of Finance personnel from the Central policy unit that day.

The following Tuesday, October 18, 2010, ECB and EC officials returned to the Department of Finance, where they met with Michael McGrath, the Assistant Secretary , who now heads up the EU Affairs Unit.

The security logs reveal that representatives from the European Commission who visited the department in October 2010 would later become the core members of the Troika.

These included Laurent Moulin, Bettina Kromen, Nicola Curci, Shane Enright and Janis Malzubris. The ECB representatives included Nicholai Benalal, who would later become a key member of the Troika delegation to Ireland.

These extraordinary high- level meetings came weeks before Fianna Fail Justice Minister Dermot Ahern described claims that Ireland was to seek a bailout as "fiction", adding that "nothing is going on at the direction of government in relation to this".

Days before the bailout, the Department of Finance said that "ongoing contacts continue at official level with international colleagues in light of current market conditions". It stressed that those discussions focused on the upcoming Budget and the four-year plan. However, the charade was blown apart when Central Bank Governor Patrick Honohan gave a radio interview in which he admitted that Ireland would need a bailout of tens of billions of euro from the EC and IMF.

The Troika leaves Ireland today as its three-year mission comes to an end, having forced the State into sucking up an unprecedented €28bn in cuts and tax hikes in order to shrink the budgetary deficit.

The EC told the Sunday Independent that the issue of a potential programme was not on the agenda "in general".

"Istvan Szekely made various visits to Dublin between September and December 2010. With the exception of the negotiating mission in late November 2010, the purpose of these visits was to discuss the implementation of the new European Semester/Europe 2020 strategy and the enhanced surveillance involved for Ireland. Except the negotiating mission, the issue of a potential programme was not discussed in those meetings, as it was not on the agenda in general.

"Istvan confirms that he did meet the indicated officials on those days, to discuss issues related to the above-mentioned topics. As part of the discussion on enhanced surveillance, certain measures that can help correct the imbalances that had been accumulated were discussed, including measures in fiscal policy, banking, and structural policies. Similar discussions took place with other member states during the same period, and similar missions on the European Semester/Europe 2020 strategy took place to other member states in his directorate, including Slovenia and Bulgaria," said an EC spokesman.

The Department of Finance insisted that "the meetings were not to discuss a potential bailout". A spokesman said, "There would have been ongoing discussion with the IMF pre and post-bailout but again there was no discussions on a potential bailout in advance." The department added that meetings with EC officials related to the National Recovery Plan and meetings with the ECB related to the banks. It declined to reveal the names of the officials attending the meetings.

Irish Independent

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