Thursday 26 April 2018

Varadkar wants new deal on Anglo

Minister tells Europe that Ireland took the pain to save euro and deserves better bailout terms


A SENIOR government minister has told Europe for the first time in public that Ireland expects a new deal to manage our crippling Anglo Irish Bank debt.

The Minister for Transport, Leo Varadkar, has said that when the global financial crisis crossed the Atlantic to Europe and landed on Irish shores "we stood in the breach".

In a flourish of rousing rhetoric during a speech in Paris on Friday night, Mr Varadkar said: "We guarded the 'bearna baoil' for all of Europe" (translated to mean that Ireland guarded Europe from the "grim gap of death").

This emotive reference from Amhran na bhFiann is the most direct demand from an Irish minister to date to our European partners for a better deal on our debt.

Referring to the Government's desire to renegotiate the €30bn promissory note for Anglo Irish Bank, Mr Varadkar said a "new arrangement" would have to be found.

"In the coming months, we will need Europe to stand behind us," he said.

"For Ireland to emerge quickly from the IMF/EU programme, which is in the interest of all Europeans, we will need to find a new arrangement to replace the Anglo promissory notes and we will need support for our plans to reinvest the proceeds of sale of State assets into our economy," he warned starkly.

Mr Varadkar said Ireland has paid a high price for being in the euro in terms of not being able to inflict losses on bank bondholders and that if this country had not been in the euro such bondholders in Irish banks would have been burned.

"Without the backing and restraints of the ECB, we would certainly have had to embark on more aggressive bank-resolution polices, which would have meant passing on major losses to financial institutions here in Paris and elsewhere," he said.

Being part of the euro also prevented the Government from devaluing our currency, which would have enabled us to ease the burden of the financial crisis, he said.

"Had it not been for our membership of the euro and the constraints that go with it, Ireland would have pursued, and would have had to pursue, very different policies. We would certainly have devalued our currency, giving us an unfair competitive advantage over our neighbours," he said.

Mr Varadkar was addressing the Ireland Fund of France event at the Pavillon Dauphine, Paris.

His remarks come amid fresh uncertainty over Greece's debt crisis, which Finance Minister Michael Noonan has said places Ireland at risk as long as it continues.

Mr Noonan has told the Sunday Independent that Ireland is at risk if the Greek crisis is not sorted out.

Explaining why the Irish debt question did not feature at the meeting of European Finance Ministers on Thursday night in Brussels, Mr Noonan said it was imperative to sort Greece out first.

"The longer the Greek problem continues, the greater the destabilising risks for the rest of Europe, including Ireland.

"Once Greece is sorted, then hopefully we can get Ireland dealt with," he said.

Mr Noonan said he was not seeking to obtain the same write-down arrangements as Greece.

Referring to proposals that the European Central Bank might forgo its maturity profit on Greek bonds that it had bought at knockdown prices, Mr Noonan said: "We have never requested that."

He said that if the European Central Bank allowed a debt write-down, then it would open the door for Ireland to seek movement on the promissory-note arrangement.

When asked about when such a deal could be expected, Mr Noonan said that while he had always said the issue was a medium-term one, we were now getting to that point.

Mr Varadkar's comments come a day after Communications Minister Pat Rabbitte suggested to The Wall Street Journal that such a deal on the promissory notes could be struck in the "next few weeks".

Sunday Independent

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