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Dublin: 11 °C Saturday 18 May, 2013

Negotiations on bank debt deal ‘best done in private’ – Hayes

Finance Minister Michael Noonan will meet with his counterparts in Brussels next week to lay out Ireland’s case for reducing the burden of Ireland’s bank debt.

Michael Noonan and Brian Hayes
Michael Noonan and Brian Hayes
Image: Laura Hutton/Photocall Ireland

A GOVERNMENT MINISTER has said that negotiations on a deal to reduce the burden of Ireland’s bank debt are “best done in private”.

Brian Hayes, the junior finance minister, was speaking amid reports that the government will look to get a deal on reducing its bank debt by the end of October.

Hayes acknowledged that this was important in light of negotiations with the Troika as the country needed to be in a position to state how it plans to fund itself over the following 12 months.

He told RTÉ Radio that following an agreement in principle among EU leaders last week to bailout Spain’s troubled banks directly from the European Stability Mechanism it was expected there would be a deal retrospectively on Ireland’s bank debt.

“We’ve made it absolutely clear following the breakthrough last week that the issue is now firmly within the eurozone finance ministers,” he told Morning Ireland.

Finance Minister Michael Noonan is due to meet with his EU counterparts next Monday in Brussels where the Irish Times reports that he will outline his interpretation of the deal agreed last week that bank debt should be separated from sovereign debt.

The €63 billion effectively poured into Ireland’s troubled banking sector has been placed on the country’s sovereign debt which effects its borrowing rate and overall financial health.

Transferring the debt away from the sovereign would have the effect of bolstering Ireland’s hopes of returning to normal lending markets next year. It appears unlikely that 100 per cent of the debt will be transferred but some reports indicate that around half of it might be.

Hayes said that “negotiations are best done in private” but said that the government was “not putting figures on it” adding: “We have been working up different options… the hard work starts now”.

Fianna Fáil’s Timmy Dooley told the same programme that it was “now up to the Irish government to put a very strong case on the basis of equal treatment” saying that the same deal done for Spain should also be applied to Ireland.

Asked if this meant a full reimbursement of the €63 billion that had been poured into Ireland’s banks, Dooley said it was the “least we would expect”.

“I think that’s the obvious follow through from separation of bank recapitalisation from the sovereign which now appears is going to apply to Spain and every country that follows hereafter,” he said.

Also speaking to RTÉ Radio this morning, the economist Colm McCarthy said that the issue of negotiations over Ireland’s bank debt was “not a diplomatic problem, it’s a financial problem.”

While not stating any particular amounts as to how much of Ireland’s debt could be transferred away from the sovereign he said that anything of the order of €5 billion or €10 billion would not be sufficient.

McCarthy said that any deal would have to be “sufficiently effective to restore the solvency of Irish state”.

Read: Government to focus on ‘fleshing out’ EU debt deal

Explainer: What did the EU leaders agree in Brussels?

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Comments (27 Comments)

  • We deserve the same deal as Spain. We’ve played ball long enough and took the hit for europes banks.

    Reply
  • Dave 02/07/12 #

    Every cent needs taking off the sovereign and nothing less is acceptable.

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  • Why is there even negotiations?

    You add up all it cost us to save European banks and write us a cheque and take the equity/assets where necessary.
    Nothing other than this is acceptable.
    No negotiation Noonan, Hold the line;
    EQUAL TREATMENT RETROACTIVELY.

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    • I wouldn’t encourage rioting, but if this bank debt deal doesn’t look like a complete wiping of the slate then we need to mobilize the biggest March to leinster house that this country has ever seen!
      We never kick up a stink, so if we do we would send a message to Europe that we’re not taking it any more and could help the government get what we NEED.

      Bank debt is 40% of our Sovereign debt. (Noonan on RTE).

      We have been very patient but this is the deal of generations to come so we can not and will not waste it.

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    • Shayno your comment suggests that Spain won’t have to repay the EU funding used to recapitalize their Banks. nYour monumental lack of understanding would be the kind of reason that negotiations around this issue would definitely be undertaken in private.

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    • Shayno your comment suggests that Spain won’t have to repay the EU funding used to recapitalize their Banks. nYour monumental lack of understanding would be the kind of reason that negotiations around this issue would definitely be undertaken in private.

      Reply
    • Mark, I do not need a Masters in economics to know that this is a one shot deal that will set the path of our country for decades to come.
      We all need to band together now to make sure we do everything to maximize the benefit to Ireland.

      This is my suggestion, feel free to contribute productively with what you think might help strengthen the outcome for Our nation.

      Reply
  • Even worse than lying their way into power is the constant insults to our intelligence. They take credit for ‘negotiating ‘ the interst rate reduction that was given to us automatically on foot of the easing of repayment terms to Greece, and now they’re ‘negotiating’ a deal on bank debt that only materialised thanks to spain and italy acting in it’s citizenms interests and digging their heels in on the issue of bank recapitalisation.

    Still trying to find the right way to do the wrong thing, force us to repay other peoples debts. There is no acceptable, just way to do such a thing.

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  • I just wish I had some faith in Noonan, Hayes and co to have the balls to do what is right. They have let us down too many times by accepting whatever Europe decides to give us rather than put up a fight to get us what we deserve & what we are due.

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  • treat the electorate like mushrooms etc…in the dark and fed horse shit..

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  • Its bad enough that Laurel and Hardy will be over there negociating for us but whats more worrying is that its taken Merkel and the other European Leaders over 4 years to realise that loading a country with banking debt and crippling then with austerity was the wrong way to go. The man in the street with a basic grasp of economics has been advocating the opposite for quite some time.

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  • Private for or from whom. In private from the people who pay back the bond holders or in private from the bond holders.definately not in private from the Germans.they can’t keep a secret.

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  • They did not negotiate the deal it was super mario and don juan that told merkel what the story was. nGood news IF it comes down the road but dont take credit for piggy backing some bodies superior negotiating skill

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  • Wonder how many FG people have been instructed to follow sites like this to push their own agenda?

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  • noonan wouldnt be able to barter in a fruit market

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  • In private with no plan.

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  • mel 02/07/12 #

    This is all spin,the ESM only lends money at an interest rate,so we are not getting a present but a loan,which will have to be paid back.
    Also the ESM is funded by the taxpayers of the EU so we are still supporting these defunct and corrupt banks

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  • Sure why would you tell the plebs who have to pay for bankers and bondholders gambling debts anything? God forbid we’d be kept informed about what the so called powers that be plan!

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  • i actually cannot comprehend the fiasco of this situation.. personally speaking i dont any of them deserve the wages their own considering the bloody mess they made, and also theyre good shafting the blame on previous leading parties when they all knew about it on the high bloody salaries..

    i mean well organised and suits the top dogs..

    Reply
  • mcbab 02/07/12 #

    Naturally. All negotiations should be done in private. No brainier.

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  • where is the transparancy on this? considering the mess the country is in and their doing deals to what get the best financial outcome, its a little suspicious considering the amount of debts we have and also the rates on the loans.. how do the people get their say if the government wont share with the voters on whats being done in the name of the public. ???

    Reply
  • censored 02/07/12 #

    Spain and Italy did it in public and it only took a couple of days.

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  • …best done in private…like all the other incredibly good-value debt deals such as the Cowen-Lenihan bank guarantee…

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  • and net result we will be told what relief if any we will get….noonan and kenny will come back with their tails between their legs when a few crumbs are thrown our way in recognition of the yes vote

    Reply

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