Kenny: Spain did not get better deal

Taoiseach Enda Kenny has hit out at opposition claims that Spain’s bank bailout is far more generous than the one Ireland is saddled with.

Mr Kenny insisted the €100m recapitalisation of Spanish banks was “slightly different” to the Irish situation.

The Taoiseach said the Spanish deal just dealt with the banking sector, whereas Ireland’s bailout was part of a wider economic package.

Mr Kenny said Spain would pay the same interest rate as Ireland regarding recapitalisation and Madrid would have to underwrite the loans.

Speaking of the drive to cut national deficits, Mr Kenny added: “Spain have to deal with their reduction to 3% by next year — Ireland has a further year in which to do that”.

The Taoiseach said discussions were continuing with the EU/IMF/ECB troika over the long-running issue of Anglo promissory notes that the Government is due to pay over the next 20 years.

EU and German officials have made it clear the Spanish deal will include some outside supervision by lenders, contradicting prime minister Mariano Rajoy who had insisted the loans came without preconditions.

EU competition commissioner Joaquin Almunia said: “Of course there will be conditions. Whoever gives money never gives it away for free.”

The news came as a key adviser to former finance minister Brian Lenihan said Spain is repeating the same mistakes Ireland did with its bailout.

Dr Alan Ahearne of NUI Galway said the Government would have been able to renegotiate its deal with the EU-IMF if Spain had got better terms.

“If Spain had been able to have injections directly from European funds into its banks then Ireland would have said that would have to be applied retrospectively to Ireland.

“It looks, at least for the time being, like that is not going to happen unless Germany and the other European leaders are forced to reverse what they did in Spain, but that seems unlikely,” he said.