Van Rompuy gives hope to Irish on bank debt deal

Irish hopes of securing a crucial bank debt deal were boosted by European Council president Herman Van Rompuy — though he admitted he had no influence over the matter.

Mr Van Rompuy pointedly referred to the contentious issue of a “writedown” breakthrough concerning the €64bn that Irish taxpayers bailed out the country’s banks with as he met Taoiseach Enda Kenny.

Mr Van Rompuy’s intervention was seen as a morale booster for the Coalition as he directly referred to an outline initiative agreed by European leaders last June.

At the time, the Government said the move was a gamechanger, but since then it has become mired in confusion as countries argue over whether it should include “legacy” debts such as the ones for which Ireland is still paying.

Speaking about Ireland’s six-month presidency of the European Council, Mr Van Rompuy said: “One of the key objectives is to break the vicious circle between banks and sovereigns, especially, especially for Ireland.”

Mr Van Rompuy made it clear he was not involved in the negotiations between the ECB and Ireland on the matter, but added: “I really hope for a positive outcome”, as he appeared to boost Ireland’s bid to be treated as a special case when it comes to crippling bank debt.

Mr Kenny responded by saying that Ireland was working towards a bank debt deal and the Government’s immediate priority was the looming Anglo debt repayment of €3.1bn due at the end of March.

“We do hope to have a conclusion on that matter before the March date,” said Mr Kenny, who added that he would use the rotating presidency to push a wider banking solution for Ireland.

“Clearly that’s of importance to us. The particular issue, the question of legacy assets and legacy debts.

“These particular circumstances are unique circumstances in which Ireland finds itself in and we are the only country with these circumstances.”

Tánaiste Eamon Gilmore said that combating youth unemployment would be the key aim of the presid-ency as well as making progress on eurozone banking union.

Mr Kenny also warned that it would be disastrous for the UK to leave the EU.

The Taoiseach said that Britain was an essential member of the union despite being outside the eurozone.