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letters of note

These are the letters sent between Brian Lenihan and the ECB before the bailout

The ECB has finally decided to release the infamous letters.

THE ECB HAS decided to publish the letters written by former president Jean-Claude Trichet and then-Finance Minister Brian Lenihan.

In a statement today, the ECB said that the letters were part of the Governing Council’s decision to re-consider the release of the letters.

The letter sent by Trichet was published in today’s Irish Times and threatens Ireland with the withdrawal of emergency funding unless a bailout is agreed to.

“With this decision, the ECB honoured the European Ombudsman’s call for the Governing Council to re-consider the release of the letter. The Governing Council also decided to disclose a further three letters that were part of correspondence between the ECB and the Irish authorities in the run-up to the official application of Ireland for support under an EU/IMF adjustment programme.

“Also included are public documents with statements and positions of the ECB on Ireland.”

October 15 2010, Trichet writes to Lenihan, pointing out issues with the “extraordinarily large provision of liquidity to Irish banks”.

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Lenihan responds 20 days later. He says that the Irish government is “concerned” about the widening spread on Irish government bonds. He adds that he wants European chiefs not to “undermine” Ireland’s efforts to “address the difficulties” and asks Trichet to “use his influence to help calm markets”.

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Trichet responds on 19 November, effectively threatening Ireland that if a bailout isn’t agreed to, funding for the banks will be stopped. He demands “swift action”. 

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Lenihan responds two days later. He says that he understands Europe’s concerns. He gives assurances on the banks that are receiving assistance and says that the government had that day “decided to seek access to external support”.

“This grave and serious decision”, he calls it. 

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Read: ‘Take a bailout or we’ll cut emergency funding’ – ECB to Ireland in 2010

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