'Perfect gentleman' Trichet dictated terms to Ireland
The Coalition seems to have Stockholm syndrome when it comes to the clear threat made by the former ECB chief
'With regard to threats, the ECB does not operate that way. Jean-Claude Trichet is a perfect gentleman." That's what Michael Noonan told me in the Dail Chamber on November 2, 2011. In light of Trichet's 2010 letter, published this week, that's a pretty extraordinary thing for him to have said. Because unlike the rest of us, he had access to the letter - and the letter contains a direct and serious threat, along with a set of demands no Central Bank has the right to make of any democratically elected government.
The minister and I were debating a $1bn payment being made that day to Anglo Irish Bank bondholders - the type of payment Mr Noonan vehemently opposed in Opposition. What he said on the topic just a few weeks before the 2011 General Election is relevant to Trichet's letter.
"What legal or moral compulsion is there on Ireland to honour in full debt incurred by Irish banks when there was no State involvement in the arrangements? These loans were entered into freely by willing lenders and borrowers with absolutely no State participation…It is obscene that the liability for these loans is now being transferred to the Irish taxpayer, in many respects to the poorest of the Irish taxpayers… What a disaster and an obscenity…There must be transparent, open, negotiated burden sharing of bank debt."
