Bondholder U-turn was not possible, says Kenny

THE EUROPEAN Central Bank refused to give its agreement “in the most trenchant fashion” to Ireland reneging on the payment of €715 million to Anglo Irish Bank bondholders, Taoiseach Enda Kenny told the Dáil.

“The situation in this country was clarified by the people last February when they gave this Government, comprised of the Fine Gael and Labour parties, the largest majority in the history of the State to pursue a policy of growth and not default,” he said.

Mr Kenny said €17 billion had been paid to bondholders in the bank by the previous government.

He would love, he said, to stand up and say it was not necessary to pay the money. “If the Government had defaulted in these bonds, we would not have had the support of our colleagues to get a €10 billion reduction in interest rates,” he added.

There were heated exchanges between the Taoiseach and Opposition TDs who had proposals for an emergency debate voted down.

Sinn Féin leader Gerry Adams accused Mr Kenny of “wilfully preventing” a debate and led his TDs from the chamber for the Order of Business.

Members of the United Left Alliance (ULA) also walked out.

Mr Kenny described the walkout as “arrogance”. He said the Government had agreed to a request from Sinn Féin and the Independent TDs that the Dáil sit this week. Opposition leaders’ questions had focused on the euro zone crisis and the situation regarding Anglo and a debate would follow on the European Council.

Fianna Fáil leader Micheál Martin said every member of the Government, including the Taoiseach, was elected on a commitment not to pay the bondholders.

“He can dress up his position in all of the brazen nonsense he wants, but he cannot wriggle out of his own clear words,” he added.

Mr Kenny said any comment he made was on the basis of not committing another cent to Anglo beyond what already had been committed.

Mr Adams asked why the money was being paid, given that the bank was fully nationalised.

Mr Adams suggested the Taoiseach telephone bank chairman Alan Dukes and tell him not to pay the money. “I have no intention of getting on the telephone to Mr Dukes,” the Taoiseach replied.

“Any decision we take will be made in the best interests of our people and our country.”

Referring to the bondholder payment, Minister for Finance Michael Noonan said: “It is a choice between two evils, as far as I am concerned, and the decision we are making is the lesser of two evils.” He believed it was “more in the interests of the Irish people to grit our teeth and allow Anglo Irish Bank to pay the bond than to default, because default takes us over the edge of the cliff”.

Independent TD Shane Ross said that earlier this year some people were picking up the bonds at a price below 60 cents in the case of larger volumes.

“They decided to buy because they believed the Government would sting taxpayers as opposed to buyers of bonds,” he added.

Richard Boyd Barrett (ULA) said the people of Greece had won, through determination and resilience, the right to have a vote on their economic and social future.