Gilmore signals talks on bondholders issue

THE Tánaiste has confirmed the Government will hold talks with the European Central Bank in the autumn about inflicting losses on senior bondholders at Anglo Irish Bank and Irish Nationwide.

Eamon Gilmore made his comments while attending the Irish Congress of Trade Unions biennial conference in Killarney.

Mr Gilmore said that while the Government has not quantified the amount required, it was seeking “contributions” from bondholders as part of the recapitalisation and those included senior bondholders in Anglo and Nationwide.

He said the Government had been clear from the beginning that it wanted a change in the terms of the agreement that exists between Ireland and the EU/IMF/ECB troika.

“The troika is visiting Ireland this week and they will be looking obviously at what is taking place,” he said.

“We are very satisfied the country is on track with the programme to date and there will be a continuing dialogue with the troika and with the ECB in relation to issue of bondholders.”

Mr Gilmore said the Government was on a war footing, with nothing less than Ireland’s sovereignty at stake, but added it was clear Ireland was in an entirely different set of circumstances than some other countries.

“The Irish economy is strong, there will be growth in the Irish economy this year for the first time after three years of recession, there will be a balance of payments surplus and our exports are strong,” he said.

“That said we have major challenges to face and we have a big adjustment to make in the budget later this year. That will be painful and difficult but what all of this is about is to ensure the economy recovers, that we regain our economic sovereignty that we are able to work our way out of the EU/IMF/ECB programme and be able to pay our way in the world again.”

It was put to him that the troika stood to make a €9bn profit from Ireland’s bailout and he said that was why the Government had been talking to its international counterparts about the need to reduce the interest rate.

“We have been making the case very strongly that this country which has been complying with the terms of the programme, which shows the best prospect of recovery in the eurozone and in Europe, should benefit from that reduction in the interest rate,” he said.

Mr Gilmore also said a part of the programme agreed with the troika committed it to targeting workers in “sheltered” areas of the economy and in some professions.

“The Government is determined that everyone in society, no matter what areas, no matter what profession, they will have to make their contribution and shoulder the burden that has to be shouldered,” he said.

Mr Gilmore was asked how his Labour Party colleagues would react if Justice Minister Richard Bruton’s review of Joint Labour Committees meant a cut in pay for some of the lowest-paid in society.

JLCs set the rates of pay and conditions for hundreds of thousands of workers in areas such as hairdressing, catering and construction.

Mr Gilmore firstly dismissed any speculation that JLCs may be done away with. He said a lot of assumptions were being made about the review.

“I do not think that anybody at this point should jump to conclusions as to what those reforms will entail,” he said.