Anglo deal pushed out until March

The issue of where Ireland might get the €31bn to replace the money it put into its banks was still up in the air as the new ESM rescue fund was officially launched in Luxembourg yesterday.

Meanwhile, Finance Minister Michael Noonan pushed the date for a deal on the Anglo promissory notes out to March.

Asked whether the fund would provide money for countries to cover existing legacy bank debts, ESM managing director, Klaus Regling was short and to the point. “It has not been discussed in any EU meeting so far.”

Earlier Mr Noonan, on his way into the inaugural meeting of the fund, seemed resigned to there being no clear answer on the horizon as to where he would find the money to make the country’s debt more manageable.

Direct bank funding by the ESM depends on the single banking supervisor being in place, which Mr Noonan said was expected to happen sometime between January and March. He did not believe that the issue of the legacy debt would be dealt with at yesterday’s meeting.

“On the promissory notes, the political timeline is to get a new arrangement put in place by March.” The next payment of more than €3bn is due in March.

While it was assumed that the €500bn ESM would deal with legacy bank debts, a statement from the German, Dutch and Finnish finance ministers threw it into doubt, saying said it could only help banks that get into difficulties in the future when the ESM is the supervisor.

Negotiations continue in the background on the Anglo Irish promissory notes but as yet none of the proposals to ensure Ireland gets longer-term, cheap money to cut the debt have found favour with all those involved in such a decision — mainly the ECB.