Kenny dampens hopes of debt deal before budget
The Taoiseach was speaking after the president of the European Parliament, Martin Schulz, said Europe must keep its “promise to Ireland” on bank debt or risk losing the trust of its citizens.
The German MEP, who addressed the Dáil yesterday, said the European Council agreement in June on separating banking and sovereign debt must be honoured. “For me the conclusions for the June council are clear, there is no interpretation.”
Last month the finance ministers of three EU countries — Germany, the Netherlands, and Finland — cast doubt on an easing of debt when they said the agreement would not apply to legacy bank debt.
To applause, Mr Schulz told the Dáil: “I believe the Irish programme should be adjusted before the end of the year along the lines of the June European council conclusion.
Speaking before Ireland takes over the EU presidency in January, he said: “Irish taxpayers are now paying the bankers’ bills to stop a domino effect that could have dragged the whole European banking system down and therefore solidarity with Ireland is to give something back.”
He said Ireland had met the targets set out by the bailout troika, tackled its financial problems with determination, and ratified the stability treaty.
“It is my personal conviction that in this union everybody has to live up to their commitments and be responsible for keeping their own house in order. This is one side of the coin. The other side of the coin is solidarity.
“If one family member gets into troubled waters, the others are called upon to offer a helping hand.
The Taoiseach said the council had agreed to sever the “toxic link” between sovereign and banking debt and there was a “legitimate expectation” they will follow through on this agreement.
Michael Noonan, the finance minister, said last week he would like some movement on the issue before December’s budget.
However, Mr Kenny did not seem confident of this happening when asked at a joint press conference with Mr Schulz.
“Will we have a conclusion by the end of the year? You will recall [EU economic commissioner Olli] Rehn said he would like to see it finished by the end of October but I made the point I didn’t think that wasn’t practical. I would like to think it could be concluded by the end of the year, but it’s important to get the right decision and that’s where our focus is, as distinct from naming a particular date.”
Mr Schulz told the press conference: “The promises made to Ireland in June must be kept by the EU.”
