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French president Hollande: Ireland's bailout is 'a special case'

Francois Hollande echoes Angela Merkel’s comments – saying Ireland differs from other countries because the bailout was forced on us.

FRENCH PRESIDENT Francois Hollande has further bolstered Ireland’s hopes of being able to recoup some of the costs of its bank bailout from other Eurozone countries – by describing Ireland as “a special case”.

The comments from Hollande came at the end of a bilateral meeting between the French president and Taoiseach Enda Kenny, who visited Hollande at the Elysse Palace today, a day after speaking by phone with German chancellor Angela Merkel.

Speaking to reporters afterwards, Hollande echoed Merkel’s comments in a joint communique last night, saying Ireland was “a special case and should be treated as such”.

Enda Kenny, elaborating on Hollande’s comments, said the ‘special’ aspect of Ireland’s situation was the fact that it had a bailout “imposed” on it as a direct result of the banking collapse, and not necessarily as a result of its fiscal position.

The Taoiseach said the Irish public had been asked to repay the full debts, with the government not being given the opportunity to impose losses on its sovereign bondholders.

Both Merkel and Hollande’s comments about Ireland being a “special” case refer to the deal reached by the three leaders, in conjunction with their 24 counterparts from elsewhere in the EU, at the European Council on June 29.

That deal saw leaders agree to improve the terms of Ireland’s bailout, and simultaneously to “break the link between banking and sovereign debt”.

Ireland has spent €64.1 billion so far on rescuing the country’s banks, of which €34.7 billion has been spent on IBRC, the successor to the defunct Anglo Irish Bank and Irish Nationwide.

Over €25 billion has been invested in the two ‘pillar banks’, AIB and Bank of Ireland.

Ireland has been hoping that new rules being applied to the Spanish banking bailout – where banks can draw funds directly from the ESM bailout fund, and not through a government loan – could apply retrospectively to Ireland.

Though the banks have already been recapitalised, this could mean that the ESM may buy some of the shares in the two pillar banks that Ireland has received in exchange for bailing them out. This could help to recoup some of the cost of saving them.

Hollande’s support may further help Ireland’s case, however, as he is the most high-profile EU leader from the pan-European left-leaning group, the Alliance of Socialists and Democrats. Merkel is his highest-ranking counterpart in the centre-right European People’s Party.

Read: ‘Ireland is a special case’: Kenny and Merkel commit to improving bailout

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