MICHAEL NOONAN HAS told Bloomberg TV that Europe now owes Ireland as it has become the ‘A’ student in fulfilling a bailout programme.
In a wide-ranging interview, the Finance Minister said Ireland has a “strong case” to get help from Europe to cut the ties between sovereign and banking debt.
“Part of the intervention which put the burden of the bank debt – 40 per cent of GDP – onto the shoulder of the taxpayer, while some of it was our own fault, a lot of the action was taken at the direction of the ECB to prevent contagion spreading to the European banking system.
“As Ronald Reagan used to say, ‘We took one for the team.’ And I think the team owes us now.”
Noonan is still optimistic that a deal can be reached to allow for some sort of retrospective compensation in relation to the €64 billion pumped into Irish banks over the past five years. “There is a lot of goodwill on the political side in Europe to facilitate us in some way.”
There is a general understanding that we will be looked after, he added.
During the interview, Noonan dismissed the Bundesbank’s perceived problems with Ireland’s recent promissory note swap.
“The discussions have been going on for several months. It couldn’t have happened unless it was agreed in Frankfurt.”
There was no dissent when it was noted unanimously by the council of the ECB. The Bundesbank subsequently commented along the lines we expected them to comment, he said.
“They didn’t challenge what was done…no rules were broken.”
He said he didn’t expect any legal challenge on the promissory note arrangements from “any authority or institution in Europe”. Individuals may take cases but “they don’t go very far”.
“The deal is done…The ship has left the port and is sailing on under new rules. There is no suggestion that this will be unwound.”
Asked about Ireland’s return to the markets, Noonan confirmed a long-term bond will be issued in the next four months. To qualify for the ECB’s bond-buying programme, two long-term issuances must be completed.
However, Ireland would only use the programme as a “backstop” – to let lenders know it is there.