Ministers head for Europe to get support for Anglo debt reduction
The lobbying of EU members to agree to the reduced terms will see Enda Kenny travel to Paris in the coming weeks as well as other ministers travelling to Spain and Portugal, among other countries, she told the Irish Examiner.
Ms Creighton said the main proposal to reduce amounts going to Anglo was a cut in the interest rate on IOUs and a stretching out of the payment period.
Troika lenders are drawing up the proposal, which is expected to be circulated to the 27 EU members. They must ratify it before it can be agreed.
“It’s predominately focusing on the interest but there are other avenues as well. To reduce it and to prolong the payment period, that would be the ideal outcome.
“It’s going to take a bit of time. I don’t anticipate this will be done in a matter of weeks.”
“They’re looking at a number of options but that’s the primary focus.”
Asked how much could be saved, Ms Creighton said: “A number of billions I would say, I don’t want to put a figure precisely on it but I certainly think there’s potential to make a substantial saving. And it would be of huge benefit to the country in the medium and short term.”
Finance Minister Michael Noonan is in talks with bailout lenders — the EU, IMF and ECB — to get agreement on reducing the Government’s costs of financing about €31bn in promissory notes injected into Anglo, since renamed the Irish Bank Resolution Corporation.
Interest payments on the IOUs for IBRC are estimated to cost over €16bn.
Ms Creighton also said that advice from the Attorney General on the need for a referendum on the new EU fiscal treaty could be known next week.
She said there was an onus on the Government to explain the treaty to citizens, indifferent of whether there was a referendum or not, amid fear that extraneous issues could enter the debate.
“They [referenda] become so divisive and so hysterical at times that of course that has to be a concern.”
A decision not to sign up to the fiscal pact would not see Ireland expelled from the euro, she said.
“We wouldn’t be kicked out of the euro but in the medium term it would prove very difficult to continue operating on the basis of trust [in the euro system]...it would prove impossible for us to be part of it if we refuse to sign up to the basic rules of balancing budgets and trying to reduce our debt.”
