Kenny: Bank debt deal is back on track

on 04/10/2012 15:10:29

The Taoiseach says the bank debt deal for Ireland is back on track.

However, Enda Kenny said it is not clear if an agreement can be concluded before the budget in December.

He made the remarks at government buildings where he has been meeting the president of the European Parliament Martin Schulz.

Mr Schulz told the Dáil this morning that EU leaders must keep their promise of a bank deal to Ireland.

Speaking at government buildings this afternoon Enda Kenny said the deal was back on track - but
getting the right agreement was was more important than the timing.

The Taoiseach said: "You'll recall Commisioner (Oli) Rehn saying he would like to see it finished by October. I made the point that I didn't think that was practical.

"There are other considerations for other countries with whom we are talking. I'd like to think it would be concluded in a reasonable time but as a minister pointed out, it's important to get the right decision rather than naming a particular date."

Earlier, Mr Schulz insisted the EU must honour its commitment to Ireland to ease the bank debt burden.

The president of the European Parliament said Europe must live up to its commitments and show the same solidarity as the Irish Government showed in the financial collapse.

"You took the burden on your shoulders to avoid the crash of the system of all the other countries, also my country," said Mr Schulz, during an address to Ireland's Dail parliament.

"Therefore I find the 27% German participation in the package for Ireland is to give back solidarity to the country that gave solidarity to us."

European Commission president Jose Manuel Barroso gave his own assurances to the Taoiseach yesterday that leaders would stick to a June agreement on separating bank and sovereign debt.

Mr Schulz said: "Everybody has to live up to their commitments and be responsible for keeping their own house in order. That is one side of the coin, the other side of the coin is solidarity."

And he called for Europe to give a commitment to stick to the June European council summit.

There had been fears that the economically powerful states of Germany, the Netherlands and Finland would fight the agreement to separate Ireland's bank debt and sovereign debt.

Last month, finance ministers from the three states said they believed the June 29 summit had only settled on the European Stability Mechanism (ESM) covering the cost of future bank debt issues.

They said it should not be liable for past problems which had already crippled some sovereign states.

Mr Kenny argued that any back-tracking on the deal would risk the credibility of the council.

Today Mr Schulz praised Ireland for exceeding its bailout targets with the Troika - the IMF, European Commission and European Central Bank.

But he added that all states must stick to their promises to maintain the trust of the public.

"The biggest risk for Europe is the lack of mutual trust," said Mr Schulz.

"How can we begin to regain the confidence of our citizens if the highest European body, the council of heads of states of government, is not reliable?"

Mr Schulz's assurances followed talks between the Taoiseach and Mr Barroso in Brussels yesterday.

He was in Dublin as part of further preparations for Ireland's presidency of the EU. He will also discuss the ongoing eurozone crisis and Ireland's jobs and growth agenda.

He said Irish taxpayers had been saddled with bankers' bills.

"Ireland got into trouble because it took over the debts of its banking system," said Mr Schulz.

"A banking system which allowed some banks to engage in unethical financial transactions based on greed, combined with irresponsible lending practices."