Minister for Finance Michael Noonan and Taoiseach Enda Kenny today both re-iterated their belief that Ireland will be successful in negotiating a deal on the €31 billion promissory note issued to help bail out Anglo Irish Bank and Irish Nationwide Building Society.
Days before travelling to Brussels for talks, Mr Kenny said negotiations on restructuring the promissory note repayments were technical and complex. But he insisted he was hopeful a solution could be reached before the end of March deadline.
“We’ve always been very clear about this. A deal on the promissory note would greatly ease our capacity to meet our debts and also ease our exit from the programme we are in,” Mr Kenny said in Dublin this morning.
“We are confident that we will achieve the deal and an agreement on this by the end date in March, which is the next payment date. Clearly this is an important issue for Ireland.”
The Taoiseach will travel to Brussels on Monday to meet European Commission president Jose Manuel Barroso, European Council president Herman Van Rompuy and Martin Schulz, president of the European Parliament.
Separately, Mr Noonan said he was confident a deal would be reached with the European Central Bank before March 31st when Ireland is due to make an instalment payment on the promissory note to settle the debts of the two financial institutions.
"The position with the promissory note is that there are ongoing negotiations. I am about at the stage in the negotiations that I expected I would be at coming into Christmas. We have to get a good result," he said in Charleville in Co Cork this morning, where he addressed a conference on Small and Medium Sized Enterprises. "This is ongoing and the promissory note instalment for 2013 doesn’t have to be paid until the last day in March – this is only the first of February so there is a long way to go yet."
Asked if the Minister for Communications Pat Rabbitte had been premature in his prediction that Ireland would not pay on the promissory note, Mr Noonan said the comments had to be looked at in context. "I think the context he (Pat Rabbitte) was speaking in was he, like myself, he was saying it was likely there will be a deal. Because it is likely there will be a deal there won’t be a payment made. That is the context."
Mr Noonan said the Government remained committed to sourcing alternative lines of credit to assist SMEs.
"The availability of credit is important because although we have repaired the banks, they are still not providing the credit flow for small businesses that I would like to see them provide and of course there must be long term alternatives sources to the banking system as well," he said.
"We have done a lot now for other forms of funding and when the formal meeting of finance ministers take place in Dublin in April the central theme will non-bank credit and non-bank finance and this is a theme all across Europe."
Mr Noonan said that the Government had already sourced some €800 million in credit through a scheme involving the National Pension Reserve Fund and various private sector funds while the Silicon Valley Bank are also providing $100 million in credit.
Minister for Enterprise, Innovation and Jobs, Richard Bruton has introduced a microfinance scheme for small businesses with a pool of some €200 million but Mr Noonan said the Government was determined to continue developing alternative lines of credit for SMEs.
"Minister Bruton’s department has brought in a credit guarantee scheme to guarantee loans so there’s a whole series of measures but we would like to strengthen those initiatives and refine them so they are effective and of use to small businesses," he said.
Asked about opposition in North Cork where groups in Ballyhea and Charleville have argued that the Government should burn the bondholders, Mr Noonan rejected comparisons being made by such groups between the plights of Ireland and Iceland. "Iceland had no victory. Iceland is not in the euro zone and is entirely a different case. The savings of most Icelandic citizens were wiped out."
"People lost their savings. They had a win in court but their situation is entirely different. It has nothing to do with us," Mr Noonan said prior to the conference, which was organised by Charleville Chamber of Commerce and Cork North West Fine Gael TD, Aine Collins.
Meanwhile, Sinn Féin has argued that the Government should seek a write-down of the promissory note — not an extension in its repayments.
Finance spokesman Pearse Doherty said the Irish people should not be saddled with the outstanding €28 billion debt.
“People want to be assured when they are paying their property tax, or septic tank charges, or increased PRSI, or whatever other taxes they are paying, that it is not going into the black hole of the Anglo Irish Bank,” Mr Doherty said.
Sinn Féin met debt masters the Troika — the European Central Bank, International Monetary Fund and European Commission — during its latest visit to Ireland.
Mr Doherty said they discussed whether the mood in Europe had changed regarding Ireland’s bid for a deal on the promissory note.
