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ECB 'held a gun' to Government's head over bailout

Labour MEP Emer Costello has been strongly critical of the troika for putting the banks and bondholders ahead of citizens.

Vitor Constancio, the vice president of the ECB, with Finance Minister Michael Noonan.
Vitor Constancio, the vice president of the ECB, with Finance Minister Michael Noonan.
Image: Mark Stedman/Photocall Ireland

THE EUROPEAN CENTRAL Bank ‘held a gun’ to the Government’s head during the negotiation of the bailout, one of Ireland’s MEPs has said.

Labour’s Emer Costello strongly criticised the troika – and particularly the ECB – for putting the needs of banks and bondholders ahead of the citizens of Europe. Speaking to Karen Coleman from radioep.ie, Costello singled out former ECB president Jean Claude Trichet for criticism.

“The ECB particularly… as one of the members of the troika really did hold a gun to the new Government’s head,” she said.

“When the new government wanted to see what could be done in terms of including unsecured senior bondholders in a bail-in, Jean Claude Trichet was the one who… allegedly said that the bomb will go off and it won’t be in Frankfurt, it will be in Dublin, because [the] ECB will withdraw funding”.

Trichet and EU Commissioner Olli Rehn were both questioned by MEPs yesterday about the role of the troika in countries which have received bailouts, including Ireland.

The issue of paying unguaranteed bondholders connected to the problem banks has remained controversial since the bailout. In December, Ajai Chopra, the former head of the IMF mission to Ireland, said that it was “unfair” on taxpayers, added to sovereign debt and created political problems.

Read: Fundamental social rights were violated by Troika programmes says EU committee >

Read: Can you name one of your local MEPs? 91 per cent of Dubliners can’t >

In full: Brian Lenihan tells the ECB why Ireland needs a bailout >

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