US told Ireland will not default on its bank debt

TAOISEACH Enda Kenny has reiterated that Ireland “has no intention” of defaulting on its bank debt.

Speaking to Fox Business Network during his visit to New York, Mr Kenny said the Government fully recognised the scale of the challenge ahead and had no intention of defaulting.

“Ireland has no intention of defaulting. Life is a difficult thing to guarantee. We recognise the scale of the challenge we face here. That’s why there is an austerity programme. That’s why we are meeting those targets. Ireland wants to pay its way, play its part, and we want flexibility from Europe to do so,” he said.

The Taoiseach also said that, while senior bondholders in AIB and Bank of Ireland would not take a hit, he could not guarantee the same for Anglo Irish Bank.

“The decisions made by my Government in respect to pillar banks, the Bank of Ireland and the Allied Irish Bank, we agreed with the ECB not to touch senior bond holders in those two banks.

“However, as Anglo Irish Bank was not subject to the serious stress tests as the other banks, and has no claim for further capitalisation, we recognise it is in a wind-down situation, its senior bond holders are in a very different category than those senior bond holders in the pillar banks.

“If a requirement comes in for further capitalisation the Government will obviously treat that in a very different way than in the pillar banks,” he said.

Mr Kenny also reiterated Ireland’s corporation tax of 12.5% was not open to discussion and that to move from it would represent “a massive breach of trust”.

The Taoiseach also spoke about the country’s 14% unemployment rate and confirmed the Government could not spend money to create jobs.