Taoiseach to hold talks with Merkel




The Taoiseach will hold crisis talks with German chancellor Angela Merkel following chaos and confusion over a bank deal on legacy debt.

Enda Kenny is scheduled to meet his fellow head of state in Berlin on Thursday to plan for Ireland’s forthcoming European presidency.

But a Government source confirmed the pair are likely to resume discussions on easing the burden of rescuing lenders after their weekend telephone call.

“I was very grateful to have the opportunity to have a real conversation with the chancellor just this week,” said Mr Kenny, when questioned about the trip.

“We have the understanding of the joint communique that we issued in regard to Ireland’s position in so far as the decision on June 29 which was taken. We intend to follow that through.”

Just last week the Taoiseach and the chancellor appeared on a collision course over whether a deal for Ireland would cover legacy debt.

Following a key summit in Brussels, Mr Kenny said European Union leaders had given a clear reaffirmation on a decision to reduce the debt.

But within hours, Ms Merkel claimed there would be no back-dated recapitalisation of eurozone banks.

She insisted if recapitalisation were possible, it would only be possible for the future.

The pair later issued a joint communique to clarify their positions.

While their remarks did not state whether the ESM could be used to ease Ireland’s debt legacy woes, it did reaffirm the June 29 agreement that the sustainability of the Irish programme would be improved.

It is likely Mr Kenny and Ms Merkel will discuss this issue further in Berlin.

Elsewhere, Mr Kenny dismissed suggestions Ireland may need to enter a second bailout by accessing funds from the European Stability Mechanism (ESM) to cover its legacy bank debts.

Norbert Barthle, a spokesman from Ms Merkel’s CDU party, claimed that if Ireland were in need of emergency funds, conditions would have to be attached.

But the Taoiseach insisted Ireland has already recapitalised its banks to the highest possible level and that Germany had already acknowledged Ireland was “a special case” in this regard.

“This is not a sort of Troika bailout situation that applies now,” said Mr Kenny.

“Ireland’s banks have been recapitalised to the highest level. That’s a matter of historical record.

“That burden has been put on our public and on our taxpayers, and that’s why we are pursuing the decision taken on June 29 to bring that to a reality, which will ease our position somewhat.”

Earlier, Mr Barthle, who sits on the German parliament’s budgetary affairs committee, said while it will be possible to use the ESM for recapitalisation, doing so should carry conditions.

Meanwhile, Tánaiste Eamon Gilmore insisted Germany would co-operate with Ireland in reaching a deal on bank debt.

“The German government will cooperate with Ireland in improving the sustainablity of our programme,” he said from Berlin, where he met his German counterpart Guido Westerwelle.

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