Noonan: Govt would have been in bad position if deal not agreedFriday 08 February 2013 18.49
Minister for Finance Noonan has said that the next step in addressing Ireland's banking debt burden was to push European heads of state to fulfill the commitments made last June in respect of bank recapitalisation.
However, Mr Noonan said that this could only happen in tandem with the establishment of a banking union and he does not see this happening this year.
He said that the Government would have been in a bad position had the deal not been agreed with the ECB.
Mr Noonan said that while the Government had been close to agreeing the arrangement with the ECB, it was not certain until lunchtime yesterday.
"We would have been in a situation, having liquidated (IBRC) and incurring the cost associated with that, if we hadn't the benefits from the other side of the arrangement," he said.
Tánaiste and Minister for Foreign Affairs Eamon Gilmore said that the next step in "lifting the burden" of bank debt off Irish taxpayers was dealing with Ireland's legacy bank debt.
Speaking on Morning Ireland, Mr Gilmore said this would involve looking at how the European Stability Mechanism can be used to recapitalise the banks.
Mr Gilmore said that yesterday's deal on resolving the Anglo Ireland promissory note was a "big step forward", but that it was by no means the end of the matter.
"We are very conscious as a Government that it is not the only thing that we have to do," Mr Gilmore said.
"We have another element of the bank situation that has to be resolved, and that is when the banking union is established, when its possible for the ESM to directly recapitalise banks, there is another phase of that."
Mr Gilmore denied that this process would have to wait until after elections in Germany, and said the process towards establishing the banking union and the Single Supervisory Mechanism was already under way.
In relation to criticism that the Government had not even requested a write-down in relation to the promissory notes, Mr Gilmore said while being "saddled" with Anglo's debts was "unjust and unfair," there was no point in looking for something that was unrealistic.
Mr Gilmore said that the Labour Party was committed to renegotiating the terms of the deal, and the change in terms achieved was very significant.
Separately, Central Bank Governor said the promissory note deal was important but there was still a lot to be done before the deficit is adequately reduced.
"It's an important element of the budgetary pressure which has been relieved," he said. "But I think there's still a lot of financial adjustment to be done".
ICTU protests to go ahead
The Irish Congress of Trade Unions has said that the protests arranged for six locations across the country tomorrow will go ahead as planned, despite the deal on Ireland's bank debt announced yesterday.
Speaking on RTÉ's Morning Ireland, ICTU General Secretary David Begg acknowledged that the deal was an "important step", but said it could not yet be said that we were near to solving the country's financial problems.
He said: "What the Government have managed to do, and give them credit for it, is they've put a car jack on the one corner of this huge weight of debt, but what we need is an enormous crane to lift it off us.
"Until we do that, we can't really say that our problems are on the road to being solved."
He said it was unfair that the Irish people were bearing 42% of the total cost of the European banking adjustment, around €9,000 per head, as opposed to an average of €191 for people in the other EU states.
Mr Begg said it would be a "fatal mistake" to believe that was the end of it.
He said the other half of the problem was the "legacy debt".