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Dublin: 21 °C Tuesday 22 July, 2014

Government to pay €1.25bn to Anglo bondholders today

The Taoiseach defended the payment in the Dáil yesterday as protests are set to take place in Dublin later today.

A protest outside the former HQ of Anglo Irish Bank in Dublin this week.
A protest outside the former HQ of Anglo Irish Bank in Dublin this week.
Image: Sasko Lazarov/Photocall Ireland

THE GOVERNMENT WILL pay €1.25 billion to senior, unsecured bondholders in the now defunct Anglo Irish Bank today as Taoiseach Enda Kenny said Ireland’s reputation would be damaged if it did not.

Despite protests from taxpayers as well as opposition parties and independent TDs in the Dáil yesterday, Kenny said: “We are not going to have the name ‘defaulter’ written across our foreheads.”

The payment will be met with protests by Sinn Féin outside the Dáil today while there are separate protests planned to take place outside the old Anglo – now the Irish Bank Resolution Corporation – headquarters on St Stephen’s Green in Dublin where there have already been demonstrations this week.

In the Dáil yesterday, Kenny and his government came under pressure to “stand up” to the European Central Bank (ECB) which has repeatedly warned of the consequences of not repaying the bond.

But Kenny responded: “I would much prefer to stand up here and say that we were in a position not to pay this. But there’s a difference between ‘won’t’ and ‘can’t’

We are not going to have the name ‘defaulter’ written across our foreheads. We will pay our way. We’ve never looked for a debt write down.

Last night, members of the Dáil technical group moved a private members’ motion calling on the government not to pay the €1.25 billion which is due.

The money is being paid because of the issuing of so-called promissory notes to Anglo by the State when it guaranteed the banks over three years ago. Effectively an IOU, it will cost the government over €3 billion plus interest every year for the next 15 years.

The State has already invested €30.6 billion in the bank by way of taxpayers money and when the promissory notes are paid up the total cost to the State of the toxic bank is estimated at over €47 billion.

The government is said to be attempting to secure a cheaper funding mechanism by way of the European Financial Stability Fund to retroactively pay for Ireland’s bank bailout at a lower interest rate.

This was the subject of a meeting between Finance Minister Michael Noonan and ECB president Mario Draghi in Frankfurt yesterday.

Column: Today, we’ll pay €1.25billion to bondholders. This must be stopped

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