Noonan promises progress on Anglo cost

Progress is being made in talks with the European Central Bank on reducing the cost to the taxpayer of bailing out Anglo Irish Bank.

Department of Finance sources have dismissed claims by economists Karl Whelan and Brian Lucey, who raised suspicions in an Oireachtas committee last week that the Government is not getting anywhere with the talks.

“It is definitely being progressed,” said a department source, adding that the issue is taking up all of the time of a number of officials who are working on it.

Since November, Michael Noonan, the finance minister, has claimed the Government is engaged in “technical talks” aimed at changing the terms of the €30bn of promissory notes it issued to the Irish Bank Resolution Corporation (IBRC) — which combines the former Anglo and Irish Nationwide.

The efforts are centred on seeking a reduction from the ECB on the 8.2% interest rates being charged on the notes or extending the term of the loan.

At a meeting with the Oireachtas Finance Committee last week, economists called for more transparency from the Government on the progress being made in the talks with the ECB.

“I suspect the minister and the Central Bank governor do believe smoke-filled rooms and technical discussions behind the scenes are the way to influence an organisation like the ECB and maybe they are right,” Mr Whelan said.

“But I have a suspicion that we might make a lot less progress on this front, that there is more of an ECB vested interest against this than we realise and it might be time to wake up and smell the coffee.”

Mr Lucey told the committee: “When the Government is talking about State money they should do it as much in public as possible.”

He said that if the ECB is simply saying no then the public have a right to be told about it.

“Are these technical discussions in fact happening?” Mr Lucey asked.

“We only have the word of the minister and I’m sure they are. But those technical discussion could be null and void.”

With a payment of €3.1bn due at the end of March, Mr Noonan is likely to come under pressure over the issue.

Asked on TV3 on Thursday whether a deal can be reached before then, he said: “We’ll see. We’re in negotiations at present and we’ll see if there will be the beginning of progress at that stage.”

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