The European Central Bank has pulled out of any involvement in the bank inquiry after public claims its comments could be used as evidence instead of an “informal exchange of views” — and private fears any participation could see it dragged before Greek politicians at a later date.
Inquiry members confirmed the situation last night after the powerful financial body said it would not submit to any questioning over its role, if any, in the economic crash, bank guarantee, and 2010 troika bailout.
In a statement confirming the move, inquiry chair and Labour TD Ciarán Lynch said the ECB was “declining to participate in the inquiry’s work” because it was not legally obliged to face questioning from national parliaments.
While discussions had been taking place up until June this year, with a similar halfway house situation to that allowed for ex-ECB president Jean Claude Trichet considered, the ECB has declined to have any involvement in the process.
“The [ECB’s] response is disappointing given that the committee made every effort to accommodate the ECB and also to facilitate it in reviewing and responding to statements and evidence given at our public hearings which referenced the role and influence of the ECB,” Mr Lynch said. “It is unfortunate and unsatisfactory that the ECB has chosen not to engage,” he said.
Labour TD Ciarán Lynch
Inquiry officials had been in discussions with the ECB since the start of the year about the possibility of its involvement in the cross-party investigation.
This was meant to focus on whether pressure was placed on Ireland to save its banks at all costs, if the European body recklessly lent to Ireland during the boom, and what, if any, role it had in the bank guarantee and its subsequent links to the bailout.
However, while meetings had continued until June this year, and inquiry officials had repeatedly noted the fact a deal was ultimately struck with Mr Trichet to allow his involvement, after this point the ECB did not engage further until a letter in recent days rejecting the possibility of participation.
In correspondence to the inquiry, the European financial body correctly noted that under laws governing its work it is independent of national parliaments and as such does not have to submit to questioning from the democratic organisations.
Ex-ECB president Jean Claude Trichet
While true, a number of inquiry officials last night separately suggested the real reason for the ECB’s failure to participate is comments from Mr Lynch after Mr Trichet’s meeting that the body’s potential evidence could be used as evidence instead of being an “informal exchange of views”.
Inquiry members are also of the belief the ECB is concerned such a meeting would create a precedent. It had been expected that if the ECB did attend, its vice-president at the time of Ireland’s economic crash — Vitor Constancio — would have attended rather than president Mario Draghi as he was in position during the high-profile issues.
Meanwhile, the inquiry will this week finish its public hearings with Finance Minister Michael Noonan, ex-IMF official and bailout monitor Ajai Chopra, economist Alan Gray and advisors to the late Brian Lenihan.
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