Friday 27 April 2018

Trichet told Lenihan to clear national decisions with ECB ahead of bailout


FORMER European Central Bank boss Jean Claude Trichet demanded former Finance Minister Brian Lenihan refer any government decision on the "imminent" bailout to him before being agreed, just days before the formal request for funding was made in November 2010, it can be revealed.

Newly released documents to the Sunday Independent, under the Freedom of Information Act, shown for the first time, include this letter sent to Mr Lenihan 10 days before he and the former Taoiseach announced that Ireland would be seeking a bailout.

It is yet another clear illustration of the extreme pressure Mr Lenihan was under from the European Central Bank, and Mr Trichet in particular, to relent and make a formal request for outside assistance.

In the letter, Mr Trichet said it was his role to "promote proactively a harmonised EU-wide implementation" of European rules and regulations "in order to foster maximum transparency and legal certainty" and to "ensure a level playing field throughout the European Union".

In the next sentence, Mr Trichet goes on to demand that Mr Lenihan and the Irish authorities share "national implementation measures with the ECB before adoption, as a way to facilitate consistency among member states and a level playing field in this area".

While couched in highly diplomatic language, senior Irish officials who were close to the bailout talks said the intent of the letter was clearly to put pressure on Ireland to accept a bailout in order to save the euro.

"It was more in Europe's interest than in Ireland's interest to accept a bailout. Things were chaotic and Greece put pressure on everyone. Ireland is small in the grander scheme of things, and putting us into a bailout would calm everyone down," one senior Irish official has said.

Finance Minister Michael Noonan told this newspaper in September that he had seen another key letter, which he described as "very direct".

Despite repeated attempts by the Sunday Independent to have that controversial letter released, neither the ECB nor the Irish Department of Finance have consented.

Sunday Independent

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