ANOTHER MINISTER has joined the calls on the EU to show solidarity with Ireland by agreeing to a deal on the country’s bank debt.
Speaking in Paris at the weekend, Minister for Transport Leo Varadkar said Europe had an obligation to do a deal on the Anglo Irish Bank promissory notes in recognition of Ireland having “stood in the breach” when the global financial crisis struck.
In the past few days Minister for Communications Pat Rabbitte and former Fine Gael leader Alan Dukes have called for a reduction in the burden on Ireland arising from the banking crisis.
Mr Varadkar said this country would have been able to pursue very different policies to deal with the crisis had it not been for its membership of the euro zone and “the constraints that go with it”.
“We would certainly have devalued our currency, giving us an unfair competitive advantage over our neighbours.
“Without the backing and restraints of the ECB, we would certainly have had to embark on more aggressive bank resolution policies which would have meant passing on major losses to financial institutions here in Paris and elsewhere.”
For Ireland to emerge quickly from its EU-IMF bailout programme it would need to find a new arrangement to replace the Anglo Irish Bank promissory notes, as well as support for its plans to reinvest the proceeds from the sale of State assets into the economy.
Ireland’s European counterparts had a moral obligation to help Ireland achieve this, Mr Varadkar suggested.
“When the global financial crisis crossed the Atlantic to Europe and landed on Irish shores, we stood in the breach. We guarded the bearna baoil for all of Europe, and in the months ahead we will need Europe to stand behind us.”
The Government wants a deal to reduce the debt burden of Anglo Irish Bank promissory notes, or State IOUs, which are being used to fund the cost of nationalised Anglo Irish Bank.
Mr Varadkar was guest speaker this weekend at the Ireland Fund of France’s biennial ball in Paris.
During his visit to the French capital he also met French environment minister Nathalie Kosciusko-Morizet and tourism officials in the city.
On the EU fiscal treaty, Mr Varadkar said he did not expect the Attorney General to give her advice to the Government for “a few weeks” on whether a referendum was required. He believed a referendum could be carried if the debate remained focused on the provisions of the treaty for better stability, co-ordination and governance in the euro zone.
“If it becomes clouded by other European issues, or even local issues, then it could be problematic. That’s the challenge for the Government – not to allow the Opposition to try to turn it into a referendum on austerity, which they’re trying at the moment,” he told The Irish Times.
“Anyone who understands anything knows that we’re going to have austerity either way. We have it anyway. France and Germany have recently reiterated their desire to see faster progress towards a common corporate tax base in the euro zone, a project Taoiseach Enda Kenny once dismissed as a ‘back door’ route to tax harmonisation,” Mr Varadkar said.
Alan Dukes, chairman of the Irish Bank Resolution Corporation, formerly Anglo Irish Bank, has said there was a good possibility the Government would succeed in reaching agreement on reducing the cost to the State of promissory notes which were being used to bail out the bank.
Mr Rabbitte told the Wall Street Journal that a deal on the promissory notes being used to bail out the former Anglo Irish Bank would be struck “in the next few weeks”.
