FINE Gael has moved to tone down its sometimes angry rhetoric on the banks after a week of confusion which saw senior party members repeatedly contradict one another as they tried to explain policies to the public and the markets.
The party's manifesto, published yesterday, has dropped almost all the incendiary comments contained in the previous policy document on banking published two weeks after concern at home and abroad about the party's policies. Those comments, and Labour's policies, promoted ratings agency Moody's to slash the main banks' ratings to junk last week.
Moody's decision will make it more expensive for the next government to fund banks such as AIB and Bank of Ireland and deter many pension funds that are not allowed to buy shares in organisations rated as junk.
Yesterday, Fine Gael finance spokesman Michael Noonan withdrew a previous threat to unilaterally restructure bank debt. He now says Fine Gael will only impose losses on senior bondholders as part of a European-wide framework.
In its banking strategy published at the start of its campaign, the party warned it could unilaterally impose losses on unguaranteed senior bonds if some of its proposals for dealing with the bank crisis were not implemented. The party implied this would have little effect on anybody other than unnamed UK hedge funds.
While the position has changed, Mr Noonan was at pains to say yesterday that there had been no change. "I don't think there has been a particular softening of our position on banking and burden-sharing," he said before conceding: "It might be slightly more nuanced."
All parties agree that bondholders who own risky debt should suffer losses but they disagree over what should happen to those holding senior debt that's ranked the same as deposits. The ECB is against restructuring higher ranked senior debt for fear of contagion risk.
Yesterday's manifesto also attempted to clear up the confusion around party spokesman Leo Varadkar's comments that the banks would not get another cent from FG and Mr Noonan's promise not to pump more money into the banks before stress tests are completed in late March while criticising the Government for delaying a recapitalisation. It now seems the party wants to wait until the stress tests are finished before shoring up the banks.
The manifesto also includes a pledge to close Anglo and Nationwide and share future losses with bondholders, which implies Fine Gael could yet put money into the two banks.
Turning from banking to the economy, party leader Enda Kenny declined to say that the much-touted 2014 deadline for bringing Ireland's deficit below 3pc was written in stone.
Asked three times whether Fine Gael would insist that any future coalition partner agree to the party's target of bringing the deficit below the 3pc of GDP, Mr Kenny did not offer any guarantee that a Fine Gael-led government would insist on retaining the target. Instead, he said the deadline might be extended to 2015 which would bring it just 12 months away from Labour's target of 2016.
Mr Kenny's explanation for this failure to defend a key plank of his party's manifesto was a curious one; he does not want to look beyond February 25. Quite what the point of a manifesto launch without discussion about the actual implementation of the manifesto was never explained, but that's politics.