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No deal on crippling bank debt until 2014

IRELAND will have to wait until 2014 to get a one-off deal on the burden of bank debt.

But we must make a unique case for the EU money so that other countries cannot use the Irish situation as a precedent.

That was the message following German Finance Minister Wolfgang Schauble's visit to Dublin yesterday.

Opposition politicians criticised the lack of any firm commitments at the 40-minute meeting between Mr Schauble, Finance Minister Michael Noonan and Brendan Howlin, Minister for Public Expenditure and Reform.

The Government now faces a nervous wait until at least the second half of next year to tie down the detail of the deal.

Mr Schauble afterwards declined to comment on the issue of the Anglo Irish Bank promissory notes.

The Government must pay €3.1bn before March 31, when the next tranche is due.

"It is a matter between the the Irish Government and the European Central Bank," he said. "It is not a good idea to comment on the matter."

However, he suggested there could be no reworking of bank debt until 2014, when a European Bank supervisor is in place.



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Mr Noonan said it would be the second half of 2013.

The more pressing short-term issue was a reworking of the promissory note arrangement to fund the losses at AIB and Irish Nationwide, he said.

Fianna Fail said that Mr Schauble's comments that Ireland was doing well would provide "little comfort" to thousands of struggling families.

The party's finance spokes-man, Michael McGrath, said: "Four months on from the June summit heralded as a 'game changer' by the Irish Government, the promised deal on Ireland's banking debt seems to be slipping further and further into the distance."

It was apparent now that the Government was not confident that a deal on bank debt involving the ESM could be done in the next 12 months and was now concentrating on the promissory note, Mr McGrath said.

Sinn Fein finance spokesman Pearse Doherty said that the issue of the State's legacy debt had in effect been parked until the second half of 2013.

Government sources said Mr Schauble's comments that Ireland would emerge from the bailout were helpful.

"It puts pressure on everyone involved to ensure that Ireland does get out," the source added.


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