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Noonan to continue promissory note campaign at Eurozone ministers' meeting

The minister for finance will meet his Eurozone counterparts this evening, and be joined by the non-euro ministers tomorrow.

Michael Noonan says Ireland's bailout progress provides an opportunity to revisit the issue of its promissory notes.
Michael Noonan says Ireland's bailout progress provides an opportunity to revisit the issue of its promissory notes.

FINANCE MINISTER Michael Noonan has said he will continue to lobby for a deal restructuring Ireland’s promissory notes at the margins of this evening’s Eurozone finance ministers’ summit in Luxembourg.

The finance ministers of the 17 eurozone countries are meeting this afternoon for what are likely to be crucial talks on trying to stave off the possibility of a Spanish sovereign bailout.

Chief among the talking points will be Spain’s formal request for funding to recapitalise its banking sector, though Noonan said he would take the opportunity of the meeting to discuss the promissory notes with individual ministers.

Noonan told reporters ahead of the meeting that the summit would discuss Ireland’s successful completion of the latest EU-IMF bailout review, and that he would be given an opportunity to raise the promissory note issue formally.

“I always raise the promissory note issue,” Noonan said, “but probably on the margins with the people I want to talk to.”

With regard to Spain, Noonan commented that he believed the “experience of Ireland should be learned by the European authorities”, and implied his dissatisfaction with the funding for Spain’s banks being directed through its government.

“To recapitalise their banks and to transfer their accounting of it into the Sovereign seemed to be an additional burden,” Noonan admitted.

‘Spain might not cost €100bn’

He expressed caution, however, about the €100 billion figure being cited as the amount needed to rescue the Spanish lenders – saying similar estimates had put the cost of recapitalising Ireland’s banks at €50 billion to €60 billion, while it had ultimately turned out to be around €24 billion.

Though the initial announcement of a funding deal for Spain “hasn’t convinced the markets,” Noonan said it was too early to say a Spanish bailout “hadn’t worked” when Spain had not formally made a request for funding, nor indicated the exact amount it would need.

He further explained that Ireland would continue to advocate a policy of separating banking debt from the sovereign, saying it would make most sense for the EFSF or the ESM to lend money to the banking sector directly and not using the Spanish government as an intermediary.

Noonan conceded, however, that there were “no papers in circulation so far to show any real policy initiative” in that regard.

Both European economics commissioner Olli Rehn, and IMF managing director Christine Lagarde, are also attending – with Lagarde telling reporters she was attending simply to offer the IMF’s assistance and input in achieving whatever targets they set.

French finance minister Jutta Urpilainen said the meeting would largely focus on Spain, with ministers prepared to hear whatever suggestions their Spanish counterpart Luis de Guindos was willing to say.

Today’s talks are a prelude to tomorrow’s summit of all 27 European Union finance ministers, which will discuss the outcomes of last weekend’s G20 summit in Mexico, and proposals for a Financial Transaction Tax and an Energy Taxation Directive.

Read: Irish GDP per head fourth highest in Europe

Explainer: Have Spain and Italy been ‘bailed out’?

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Gavan Reilly

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