Ministers play down German debt statement

Government ministers have rejected suggestions that statements by Germany’s chancellor Angela Merkel on bank debt have sunk hopes of a deal for Ireland.

However, the opposition accused the Government of misleading the country over whether the EU’s rescue fund would take over backdated Irish bank debt.

Finance Minister Michael Noonan said EU states had made commitments at this week’s EU summit to abide by a statement in June, which pledged to separate sovereign and bank debt.

He said Ms Merkel had been replying specifically to a question about Spain when she said there would be no backdated direct recapitalisation for banks.

Mr Noonan did concede that clarification of her remarks was being sought.

“In response to queries that the Irish Government is putting to the chancery, we’re getting a different feedback so that has to be clarified... A lot of people take up positions after council makes decisions,” he told RTÉ.

Fianna Fáil leader Micheál Martin claimed the Government had misled the country and overplayed the June statement on hopes to strengthen Ireland’s debt sustainability.

He called on Mr Kenny to contact Ms Merkel and seek clarification on whe-ther she opposed backdating the recapitalisation of eurozone banks. “It’s bad news for the country in terms of her comments. I would further say that it’s now my view that the Government misled us in June in terms of the scale of what was agreed ….. It seems to me that the Government claimed victory before they even got onto the pitch.”

European Affairs Minister Lucinda Creighton said the only comments that mattered to Ireland were the ones agreed at the week’s EU summit. This reaffirmed commitments to separate sovereign and bank debt for states, she said.

She rejected the notion of the Taoiseach calling Ms Merkel about her statement and claimed the chancellor had been speaking about Spain’s debts: “She answered that question specifically relating to Spain. Why would the Taoiseach of Ireland phone up about a matter that is at this point and time an issue between the Spanish government and the German government?”

Sinn Féin’s finance spokesman Pearse Doherty said the Government “not only failed to get a deal on our debt, but has blown a lot of hot air about positivity when there is no progress at all”.

He said: “We see photos today of Enda Kenny and Angela Merkel exchanging kisses, but it seems it was a Judas kiss she gave him.”

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