Ireland wants deal if ECB aids Greece

Ireland would see any ECB contribution to the restructuring of Greek debt as a precedent that would boost Dublin’s efforts to ease the burden of its own sovereign debt, Finance Minister Michael Noonan said last night.

ECB policymakers were divided yesterday as to what contribution the ECB might make to a restructuring of Greece’s sovereign debt amid efforts to close a complex deal to unlock a second bailout for Athens.

Ireland, widely seen as the poster child among bailed-out eurozone countries, has been lobbying the ECB to help it reduce the burden of its sovereign debt by cutting the cost to the government of bailing out its banks.

“If the ECB are prepared to make this kind of concession to Greece it would encourage me to think that they might be ready to make concessions on the promissory note to Ireland,” said Finance Minister Michael Noonan.

“I see it, if it occurs, as a strengthening of our negotiating position.”

Officials from the ECB, European Commission and IMF were attempting yesterday to broker a deal that would open the way for a €130 billion EU/IMF rescue for Greece and avoid a disorderly default. While the ECB has ruled out joining private creditors in voluntarily accepting losses on its Greek bonds, it could provide indirect relief by renouncing profits from bonds it bought at below face value.

The ECB’s governing council, which holds a monthly meeting today, has yet to adopt a position, but some policymakers are reluctant to share the burden, in part for fear of setting a precedent.

The Government is discussing several options with the ECB on how to reduce the cost of the bank bailout, including refinancing the promissory notes used to bail out now-defunct Anglo Irish Bank and Irish Nationwide Building Society.

— Reuters