Ireland will get deal on debt, says Hollande
Enda Kenny won a powerful ally in Paris with François Hollande going further than German Chancellor Angela Merkel in assuring him that Irish taxpayers could expect some relief.
The two spent more than 30 minutes together with just an interpreter — double the normal time for such an event — and another 20 minutes meeting together with their advisers.
Mr Hollande displayed an impressive grasp of the Irish situation when both leaders spoke outside the Elysee Palace afterwards where they took far more than the advertised two questions, going into considerable detail.
It was in marked contrast to the shock statement by Ms Merkel after last week’s summit when she announced no current bank debt would benefit from the EU’s rescue fund, the ESM.
After contacts between officials in both governments over the weekend, a statement from Berlin said the chancellor acknowledged Ireland’s special position.
Mr Hollande went much further when asked if the recapitalisation would be retrospective. “Yes” he answered, explaining Ireland had recapitalised its banks from its own funds before there was an EU fund.
“It’s about acknowledging its specific position and if recapitalisation is still necessary, it could happen in 2013. We have to express our solid support and acknowledge the past.”
When asked if the ESM would cover the total Irish bank debt of €64bn, he said: “It is too early to say if it will be some or all.”
This would be taken into account by the eurozone finance ministers and its working group who will be putting together the details of how the ESM will finance banks directly.
When asked if this would not discriminate against Spain, Mr Hollande said that the Irish putting money into its banks added to its debt and this would have to be taken into account. “It’s up to Spain to put forward its own demand.”
The Taoiseach, who began his address in fluent French and finished as Gaeilge, spelt out very forcefully just why Ireland was a special case.
“The banks have been recapitalised and Ireland was the first and only country that had a European decision imposed on it and had no alternative. There was not an opportunity to do anything else like burning the bondholders and the taxpayers had to service in full the debt.”
No other country had to deal with such a situation, he said, and this was now recognised by President Hollande and Chancellor Merkel. “That is why the decision on the debt will take place once the legal framework is in place,” he added. EU leaders agreed the legal framework would be completed by January.
Mr Hollande and Mr Kenny also discussed the priorities for the Irish presidency of the EU for six months from January, and reaffirmed their commitment to a renewed common agriculture policy.
