THE CHANGE IN terms on the promissory notes following the liquidation of the Irish Bank Resolution Corporation and the deal with the European Central Bank is “very, very significant”, the Tánaiste has said.
He made the comments while speaking on RTÉ’s Morning Ireland today, where he said that work is already underway on advancing the legislation that was passed during an emergency sitting of the Dáil on Wednesday night.
The promissory notes are now gone, having effectively been turned into long-term Irish Government bonds with maturities of up to 40 years. The first principal payment on these bonds will be made in 2038.
Gilmore described the change in the terms as “very, very significant”. Speaking of the debt itself, he said “it’s unjust and unfair and of course we shouldn’t have been saddled with it”, but added “there is no point in looking for something that is unrealistic”.
On the subject of defaulting on paying the notes, he said that “default would plunge us into an economic crisis for… probably the next 20 years”.
The Tánaiste said that Ireland’s borrowing requirement is down by €20 billion over the next 10 years.
“By any standards this is a good outcome for Ireland,” said Gilmore, adding the country has more work to do in terms of bank debt.
He said that the deal “wasn’t done until it was complete” but that action had to be taken when the word leaked out about the plan to liquidate the IBRC. According to the Tánaiste, the government had anticipated the possibility that something like this might happen, and had put in place a contingency plan.
One of the issues that the Fine Gael-Labour government faced when it came into power was that “this country had little credibility around the tables in Brussels or across the table in the ECB”, said Gilmore. “The first thing we had to do was restore our reputation.”
Regarding the discussions on the EU budget, Ireland has been seeking a package of money to address the problem of youth unemployment, and he understands that €6 billion will be made available for countries experiencing high rates of this. Ireland will benefit from part of this money in the EU budget.