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Will Noonan publish the ECB letter that forced Ireland into a bailout?

Fianna Fáil has called on Michael Noonan to publish Jean-Claude Trichet’s letter himself, after the minister said it should be released.

Former ECB president Jean-Claude Trichet wrote to Brian Lenihan in November 2010 - reportedly
Former ECB president Jean-Claude Trichet wrote to Brian Lenihan in November 2010 - reportedly
Image: Markus Schreiber/AP

FIANNA FÁIL has called on Michael Noonan to publish a letter from the European Central Bank to his predecessor, Brian Lenihan, which reportedly forced the government into accepting an EU-IMF bailout.

The letter, sent in November 2010 by then-ECB president Jean-Claude Trichet, is reported to suggest that the emergency loans being granted to Irish banks would be cut off if Ireland refused to leave the bond markets and accept funding from international sources.

In an interview with today’s Sunday Independent, Noonan said the “threatening” letter should be released, and commented that the “very direct” letter left Lenihan with “little or no option” but to begin negotiations on a bailout.

The minister said, however, that he did not have the authority to order his Department’s Freedom of Information unit to release the letter – and did not suggest he had any desire to publish the letter unilaterally.

He said, though, that he would have no problem with releasing the letter to any banking inquiry established by the government or Oireachtas in the coming months.

Up to now, requests to release the letter under the Freedom of Information act – including one made by TheJournal.ie – have been rebuffed by both the Department of Finance and the ECB.

TheJournal.ie‘s request resulted in the Department disclosing the existence of several letters between Trichet and Lenihan in November 2010, but a refusal to release all correspondence which may have related to the EU-IMF bailout.

‘Serious adverse effect’

The Department said the correspondence ‘contains information communicated in confidence from, to or within an international organisation of states’ – which are not eligible for release under Freedom of Information rules.

It also said some correspondence, if released, could ’have a serious adverse effect on the financial interests of the State, or on the ability of the Government to manage the national economy’.

Using this clause triggers a public interest test, after which a senior Department official concluded that the public interest “is not best served by disclosure in relation to those records to which access had been refused”.

Among the reasons given for the refusal were the possibility that future decisions could be impaired by publishing the letters, and that the records contained information which:

[...] could reasonably be expected to have a serious adverse effect on the financial interests of the State, or on the ability of the Government to manage the national economy.

Other requests were made to the ECB by Gavin Sheridan of TheStory.ie, but were dismissed by the current ECB president himself, Mario Draghi.

When was it written?

Curiously, Lenihan has previously indicated that Trichet’s letter had been received on November 12, 2010, a few days before a meeting of Eurozone finance ministers – but no letter from around that date appears on the schedule of correspondence supplied by the Department.

Only four days later, Bloomberg quoted an anonymous EU official as saying Ireland had already begun talks on entering the bailout. The €67.5 billion funding deal was confirmed less than a fortnight later.

The only letter from Trichet which the Department was prepared to release was a letter from November 2, which discussed an unrelated matter – specifically, the ECB’s formal opinion on a plan to extend the bank guarantee.

Lenihan’s successor as Fianna Fáil’s finance spokesman, Michael McGrath, said Noonan’s statement was the first time he had acknowledged existence of the letter and urged him to publish it immediately.

“Essentially, we had a situation where the Central Bank of the 17 member state eurozone was pointing a loaded gun at the Irish government in order to get its way,” McGrath said.

“There is no reason whatsoever why Irish people should have to wait decades to understand the full background to Ireland’s entry into a formal bailout programme with the EU, ECB and IMF in November 2010.”

WATCH: 9 videos that sum-up Ireland’s banking and economic collapse

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