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Kenny and Merkel to hold crisis talks

TAOISEACH Enda Kenny is to hold crisis talks with German chancellor Angela Merkel next week.

It follows chaos and confusion over a bank deal on legacy debt. Mr Kenny will meet Ms Merkel in Berlin on Thursday to plan for the Irish European presidency starting on January 1.

But a Government source confirmed the pair are likely to resume discussions on easing the burden of rescuing lenders after a weekend telephone call.

"I was very grateful to have the opportunity to have a real conversation with the chancellor just this week," said Mr Kenny. "We have the understanding of the joint communique that we issued in regard to Ireland's position in so far as the decision on June 29 which was taken. We intend to follow that through."

Just last week the Taoiseach and the chancellor appeared on a collision course over whether a deal for Ireland would cover legacy debt.


Mr Kenny said European Union leaders had given a clear reaffirmation on a decision to reduce the debt.

But within hours, Ms Merkel claimed there would be no back-dated recapitalisation of eurozone banks. She insisted if recapitalisation were possible, it would only be possible for the future. The Taoiseach also said yesterday he would not put a term like "second bailout" on what would happen to Ireland if the permanent bailout fund, the European Stability Mechanism, is used to alleviate Ireland's bank debt.

He was responding to comments by a spokesman for Ms Merkel's CDU party, who said new conditions would have to apply if the ESM was used in such a manner.

Mr Kenny said he had never envisaged a second bailout.

"This is not sort of a Troika bailout situation that applies now," Mr Kenny said.