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Fianna Fáil accuses Govt of putting debt deal in jeopardy

“All over the place” is how Michael McGrath described Fine Gael and Labour’s handling of the Anglo debt negotiations.

Image: Brian O'Leary/Photocall Ireland

OPPOSITION PARTY FIANNA Fáil has said that the contradictory statements being made by Government ministers could potentially jeopardise any deal to reduce the burden of Ireland’s banking debt.

Party spokesperson on finance Michael McGrath claimed Labour and Fine Gael have not come up with a “coherent negotiating strategy”.

“Over recent weeks, the Government’s handling of the Anglo debt negotiations has been all over the place,” he said. “On the imminence of a deal, on the link with the Fiscal Stability Treaty and on the nature of the deal itself, different Ministers are publicly saying very different things.”

McGrath added that the ruling parties desire for a political PR coup is “jeopardising the possibility of securing the deal” before 31 March when a €3.1 billion payment is due.

He cited various ministerial interviews, including Pat Rabbitte’s with the Wall Street Journal last month in which he said that a deal would be finalised within weeks. McGrath also criticised Joan Burton for linking the passing of the EU fiscal treaty with the debt deal, noting that she has been “publicly rebuked by the Taoiseach and Tánaiste”.

Speaking on The Week in Politics last night, Finance Minister Michael Noonan revealed that the talks on restructuring Ireland’s €31 billion banking crisis debt were not only focused on promissory notes for Anglo Irish Bank and Irish Nationwide but also other moves which could boost the sector.

Noonan confirmed that European authorities and the IMF are discussing the possibility of taking loss-making tracker mortgages off AIB and Permanent TSB’s books and transfer them to IBRC, formerly known as Anglo.

The Government has been in talks with its international partners since September as part of efforts to improve the terms of repayment onIreland’s crippling banking crisis debt. It is hoped that a longer repayment period and a lower interest rate will be secured before the end of this month.

If an agreement is reached the annual €3.1 billion liability will be reduced significantly – easing the pressure on Government as future Budgets will not have to be as focussed no austerity measures as the past two have been.

More: Troika deal could move tracker mortgages to IBRC – Noonan>

Related: “The time for burning bondholders is gone”: economists address promissory notes>

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