Any paybacks due to junior bondholders at Anglo will be legally blocked, it has emerged as the Government scrambled to try and end days of confusion.
Stung by a backlash against the prospect of such bondholders attempting to gain up to €280m from the liquidated bank, renamed IBRC, Coalition sources said emergency moves would be taken to prevent the money being paid.
With Taoiseach Enda Kenny saying he could not foresee the payouts happening, it marked a dramatic shift from comments last week by Finance Minister Michael Noonan that the unsecured junior bondholders would be “legally entitled” to awards if there was sufficient capital left from the bank’s wind-up.
The junior bondholders, who Tánaiste Joan Burton called “vultures”, have until the end of May to stake their claims. That prompted opposition parties to say the Government needs to take emergency action to ensure no payouts are possible in the future.
Mr Kenny denied a major rift in the Coalition regarding tax. Ms Burton insisted there was a strong debate between the parties on the matter of tax, pointing out that Fine Gael had “chosen to emphasise cuts in the top rate of tax”, while Labour saw the universal social charge as “quite severe” in the way it hits low and middle-income earners.
Moving to quiet any impression of a split, Ms Burton said: “It is a very strong debate and discussion between the parties as we want to have a progressive tax system that produces the kind of funding that we need in this State.”
Business Minister Ged Nash said Labour would start talks with Fine Gael in the new year on ways to reduce tax levels, but party sources say this would not amount to renegotiation of the Coalition agreement. Rather, they said this was “routine”. Mr Kenny said he was concerned about the level at which the top rate kicked in as he denied putting the country on an early election footing.
“The macro-economic figures are clearly heading in the right direction but that’s of little consolation to someone who doesn’t have bread in the kitchen,” Mr Kenny said as he pledged to cut the tax rate to “at most 50%” for middle-income earners in the next budget.
Fianna Fáil finance spokesman Michael McGrath said the Government must show more urgency on IBRC.
“The Taoiseach can’t be absolutely certain the junior bondholders will not be paid unless the minister for finance is prepared to exercise his power of veto on this issue,” he said.
Anti-water charge TD Richard Boyd Barrett accused Mr Kenny of being “sneaky” after Fine Gael moved to ensure Sinn Féin’s no-confidence motion in the Taoiseach will not be held tomorrow when there will be a water demonstration at the Dáil. Fine Gael ensured the debate on the Taoiseach’s record would happen today instead.
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