We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Julien Behal/PA Archive/Press Association Images
bank debt

Rabbitte slams 'orgy of negativity' over bank debt deal

Pat Rabbitte siad that he would have preferred if Angela Merkel had not made the remarks she made but insisted that an agreement to deal with Ireland’s bank debt still stands.

PAT RABBITTE HAS become the latest government minister to insist that the agreement between EU leaders to address Ireland’s bank debt still stands despite comments by Angela Merkel on Friday.

The German chancellor appeared to rule out retroactively capitalising Ireland’s banks in comments made on Friday when asked specifically about Spain’s bank debt, but Rabbitte today sought to underline that a previous agreement between EU leaders last June still stands.

He criticised the “orgy of negativity” surrounding Merkel’s comments and claimed that there was no change in the position agreed by EU leaders on 29 June which pledged to examine Ireland’s legacy debt that is due to its bailout of the banks.

He told RTÉ’s This Week programme: “If you were read to the orgy of negativity that is around the place today, including from RTÉ, you would get the impression that in some quarters there is absolute glee about the remarks of Angela Merkel.

He continued: “The fact of the matter is there was a formal meeting of the council on Thursday/Friday. The formal position of that was the agreement of the 29 June. There is no change in that.

“It agreed that a legal framework in terms of a single supervisor of the banking system – some 6,000 banks – would be concluded by the end of the year. It explicitly says in the conclusions that the next steps, and I quote, ‘will be done in full respect of the decision of 29 June’.

On Friday, Merkel said that in relation to Spain there would not be “retroactive direct capitalisation” through the eurozone’s bailout fund, the European Stability Mechanism.

‘Rather Merkel hadn’t made comments’

Opposition parties claimed this meant that a deal to break the link between Ireland’s sovereign debt and bank debt – which is estimated at some €64 billion – was dead but the government has moved to insist that this is not the case.

Rabbitte continued: “The formal legal position of the council stands until it’s changed and it stands with the agreement of 26 other heads of State including the Chancellor.”

The Minister said that Merkel was speaking to a German audience when she made her comments and added that it should be noted she was doing so ahead of elections both regionally and nationally in Germany next year.

“That’s what national politicians tend to do locally in an election environment,” he said although he later added: ”I would rather that Chancellor Merkel hadn’t made the remarks that she made, but she made them.”

He insisted that progress was made during the two-day European Council summit in Brussels with regard to the setting up of a permanent banking supervisor across the eurozone.

Earlier on Newstalk, Social Protection Minister Joan Burton insisted that Merkel was speaking to the German electorate when she made her comments on Friday.

She said the government had set out to renegotiate Ireland’s bailout deal and said that the statement on 29 June was a “historic” one.

Read: Govt insists agreement to address bank debt stands, FF says it’s in denial

Read: Here’s the exact transcript of Angela Merkel’s comments in Brussels

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Your Voice
Readers Comments
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.