MINISTER FOR Finance Michael Noonan downplayed the prospect of any imminent deal to recast Ireland’s banking debt as he stressed that an EU pledge to review the bank rescue still stood.
With hopes of an agreement this month all but gone, Mr Noonan pinpointed dates next year in relation to the Anglo Irish Bank promissory note scheme and the use of the European Stability Mechanism fund to rescue AIB and Bank of Ireland. Arriving in Luxembourg for EU talks, he said he was still pushing for some kind of a breakthrough before the budget in talks with the European Central Bank on Anglo.
The key date was next March, he said, when another €3 billion payment falls due. “The political timeline is to get a new arrangement on the promissory note by March, when the next tranche of money has to be paid, a €3 billion call which is very onerous,” Mr Noonan said.
“But it would help me doing the budgetary arithmetic if something could be arranged – or a statement of intent could be achieved – before the budget.”
Asked if that was feasible, he said that was a question for the ECB. “I’m only at one side of the discussion. I would hope that certainly the March date is feasible.”
Similarly, Mr Noonan suggested that talks on a new euro zone bank supervisor could drag on into next year. The establishment of such a supervisor – operating within the ECB – is a precondition for any direct bank recapitalisations by the ESM. “I think everybody in the group are aiming for the 1st of January,” he said. “At the last meeting I was at there were suggestions it would be some time between the 1st of January and March. They were allowing for some weeks of drift after Christmas but nothing significant.”
While a German-Dutch-Finnish statement two weeks ago cast doubt over the scope of any such interventions, Mr Noonan said the decision by EU leaders in June to break the link between bank and sovereign debt still stood.
“The position is that the policy position as set out by the heads of state and government on the 29th of June is the policy that prevails.
“Anybody commenting on that might be variations on a theme but the policy prevails. We’ve had assurances of that from the commission and from the European authorities.”
Mr Noonan noted that the ESM had set out the pricing of loans for any bank recapitalisations and that that implied this was a policy “which everybody intends to implement”.
