Failure to get bank debt deal would be ‘disastrous’

Siptu president Jack O’Connor said the failure to reach a deal on the bank debt before the next €3.1bn promissory note payment is due in March would have “disastrous” consequences for the country.

Mr O’Connor called on the public to attend a “Day of Action” on Feb 9 to “confront the impossible burden that has been imposed upon us before it breaks our backs”.

Up to 100,000 people are expected to attend that protest.

The Government issued €31bn in promissory notes in March 2010 to cover losses in Anglo Irish Bank. A €3.1bn payment is due every March for the next 10 years.

Negotiations between the Government and the ECB about wrapping these payments into a long-dated bond appear to have hit an impasse over the past few days.

“The consequences of not getting a deal could be disastrous,” said Mr O’Connor. “It would immediately jeopardise the prospects of emerging from the bailout, as the financial markets have been factoring it in since the Jun 29 heads of government declaration last year.

“If we are unable to return to borrowing on the financial markets, we will have to go back to the EU/ECB/IMF troika for another bailout. If we get one — which cannot be taken for granted — it would come with onerous conditions attached.”

“Consequently, the Government must hang tough on the €3.1bn promissory note.

“We strongly endorse the insistence of the Communications Minister Pat Rabbitte that we cannot and must not pay it. We fully recognise that refusal to pay has potentially enormous consequences as well, including the possibility of the ECB withdrawing support from our banks and their resultant inevitable collapse. That is why securing a deal on bank debt is too important a political battle to be left to the Government alone.”

Mr O’Connor’s fellow trade union leader, David Begg, said Ireland faces “the most dire consequences” without a significant deal on the country’s €64bn bank debt burden.

“It is extraordinary to think that a country with a workforce of 1.8m has been saddled with a debt of €64bn. and that Ireland has the highest bailout bill in the eurozone, larger even than Germany,” said Mr Beggs.

“It is even more extraordinary to think that every person in Ireland has already been hit for €9,000 to pay for the incompetence of senior management in the broken banks, while the average cost across the EU is a mere €192 per head.”

He urged people from all sectors of society to participate in the Feb 9 protests.

“This is an issue that transcends all others… there is no more critical issue facing Irish society at this juncture,” said Mr Beggs.