THE FINANCE SPOKESPERSONS for the two main opposition political parties have criticised the lack of any public commitments on dealing with Ireland’s banking debt burden, following today’s visit of the German finance minister to Dublin.
Both Fianna Fáil’s Michael McGrath and Pearse Doherty of Sinn Féin said Schauble had not given any public commitment to improving Ireland’s position – which they said acted as a blow to Ireland’s hopes of finding help in meeting its banking costs.
McGrath said the deal of June 29, when EU leaders agreed to split banking debt and sovereign debt as a means of encouraging investors to lend to national governments, now appeared to be “slipping further and further into the distance”.
Though Schauble told reporters he was “very impressed” with the progress Ireland had made under its bailout programme, and said he was “100 per cent” assured that Ireland would not need a second bailout, he declined to comment on Ireland’s campaigns to share its banking burden, and to restructure the Anglo promissory notes.
McGrath said it was ‘ominous’ that Schauble had echoed comments of Mario Draghi, the president of the ECB, who said the establishment of a single EU banking supervisor – which is accepted as a pre-requisite before the ESM bailout fund can invest in banks – may not be final until 2014.
We can only assume that Ministers Noonan and Howlin asked Mr Schauble if he still holds the view [...] that the ESM could not be used to deal legacy debt.Certainly in his public comments today, Mr Schauble did not in any way unwind those comments. Following today’s meeting, we are none the wiser as to what Ireland’s ‘special case’ status will mean when it comes to securing a deal on bank debt.
Doherty said the failure to extract a public commitment from Schauble suggested that a deal for Ireland “has been parked until the second half of 2013″ and could yet fall victim to German domestic politics.
The government of which Schauble and Angela Merkel are ministers will see its mandate expire in September 2013 – and it has been suggested that their chance of re-election could be damaged if Germans believe they could be forced to cover the costs of bailing out Irish and Spanish banks.
“The German finance minister was asked on a number of occasions to state whether he believed a deal on the legacy debt was possible or desirable. On each occasion he declined to comment,” Doherty said.
“Nothing said at today’s press conference contradicts the clear statement against ESM funds being used to retrospectively recapitalise banks by Angela Merkel on Friday 19 October.”
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