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Kenny under fire over silence on Merkel’s response

Enda Kenny has come under fire for refusing to divulge German chancellor Angela Merkel’s response to his request for a deal on Ireland’s debilitating bank debt.

It came as the ECB signalled that Ireland should not expect any deal on the debt in return for passing the fiscal treaty.

ECB chief Mario Draghi said there should be no expectation of a quid pro quo for approving the treaty in last week’s referendum.

Earlier this week, the German finance ministry similarly cast doubt on the prospect of any deal.

The hardline stance of the ECB and Germany will increase the pressure on the Taoiseach and his government.

Just last Friday, after the result of the referendum was declared, Mr Kenny insisted that Ireland’s banking debt had to “form part of the solution” to the eurozone debt crisis.

At the same press conference, he told of how he had spoken with Ms Merkel by telephone and raised the bank debt issue.

However, as the Dáil resumed yesterday, offering the opposition their first chance to quiz him about that call, Mr Kenny repeatedly refused to divulge what Ms Merkel said in response.

Pushed on the issue by Fianna Fáil leader Micheál Martin, Mr Kenny said merely that the issue was “complex” and there would be “no quick fix”.

Mr Martin said the time had come for Germany to be “told directly” that radical action was required or else the EU would be dragged into “much deeper and sustained economic decline”.

Mr Kenny said he would write to all EU leaders arguing that the “banking problem in the eurozone must now be dealt with, and dealt with politically”.

Mr Draghi, speaking at an ECB press conference in Frankfurt, welcomed the Irish yes vote and said it was “a testimony” to the Irish electorate’s “responsibility”.

However, he was circumspect when asked if it strengthened the case for bank debt relief, saying he did not see grounds for a quid pro quo. Ireland had already achieved “substantial progress on fiscal consolidation and on bank restructuring”, and the “implicit message” was to “continue on this path”.

It came as Spanish prime minister Mariano Rajoy continued to push for the use of the EU’s permanent bailout fund, the ESM, to recapitalise its banks.

Ireland would hope to avail retrospectively of the same terms should Spain be granted such a deal.

France and the European Commission signalled their support for use of the ESM as officials tried to reassure investors they could contain an escalating crisis.

Germany is reluctant about federalising the bank debt of individual member states.

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