Michael Noonan: I was never threatened by the ECB

Michael Noonan has denied being threatened by the head of the European Central Bank (ECB) — but claims his predecessor Brian Lenihan was.

Mr Noonan yesterday denied he misled the Dáil and reiterated that he had not been threatened by former ECB president Jean-Claude Trichet despite the Banking Inquiry finding otherwise.

It comes as Social Democrats TD, Stephen Donnelly, called for the finance minister’s resignation over contradictions between a speech he made in the Dáil, and his comments to the Oireachtas Banking Inquiry about apparent threats made to him by Mr Trichet.

Yesterday Mr Noonan took a swipe at Mr Donnelly, saying: “Stephen Donnelly is a poor attender in the Dáil and he doesn’t attend committees, so he doesn’t have the full picture of what goes on quite frequently.”

In 2011, Mr Noonan told the Dáil, during exchanges with Mr Donnelly, that he had not been threatened.

But last year in evidence to the Oireachtas Banking Inquiry he said thatwhen he had discussed burning bond holders, Mr Trichet had said “a bomb would go off” in Dublin if he proceeded.

Taoiseach Enda Kenny yesterday backed up Mr Noonan, saying: “Michael Noonan pointed out quite clearly that the risks of burning bondholders were pointed out to him by the ECB, and that opportunities lay in other places to get a better result, which is what we did with the promissory note.”

Speaking in Limerick, Mr Noonan denied he had been threatened but said correspondence he had seen indicated there may have been a threat to the late Mr Lenihan by Trichet. “What I said in the Dáil, I said again when I gave four hours of evidence before the banking inquiry: Mr Trichet did not threaten me.”

He described Mr Trichet’s message of a bomb going off as a “prediction” and not a threat. “It was the first thing he said and he was predicting that if we burned the bond holders, that the international markets would react in a way which would be of high risk to Ireland.

“On the other hand, I did see correspondence where he seemed to be threatening Brian Lenihan with pulling back emergency liquidity assistance to the banks if the bonds were burned back in 2010. And I presume it was that that caused the committee to say that he (Trichet) threatened. But he didn’t threaten me.”

It comes as Fiscal Advisory Council chairman John McHale warned Mr Noonan and the Government may be overestimating and “auctioning off” the amount of fiscal space available in the coming years.

He said the €8.6 billion worth of fiscal space is “based on particular assumptions” and does not take into account an overheating of the economy.

“We actually think that there is a need for a further allowance for demographics and also if you were to maintain the existing level of public services and benefits, really the free fiscal space drops quite sharply to about €3.2billion. So there is a real question about affordability,” he said.


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