Taoiseach Enda Kenny, having secured a deal on the promissory notes and extra funds from the EU’s budget, said it would not be considered before next year and added: “I cannot predict the complexities associated with that”.
It came as a High Court judge in Dublin said the new Irish Banking Resolution Corporation Act appears to give no power to the courts to lift the new statutory stay in the act halting all existing proceedings against IBRC, formerly Anglo Irish Bank.
At the end of a 24-hour long EU summit to agree the union’s €960bn seven-year budget, Mr Kenny sent a clear message to trade unions on the Croke Park deal, saying there could be “no sense of easing back on the situation facing us”.
Next week finance ministers begin drawing up rules for the €500bn European Stability Fund to recapitalise troubled banks in the future, rather than having taxpayers do so in future.
If and how the fund will cover past or legacy bank debts is due to be decided next month but Germany and the Netherlands insist payments already made to rescue banks known as retroactivity — as in Ireland’s case — will not be on the table.
An EU official said: “Officially retroactivity has been ruled out.”
A German spokesman said there was no hope Ireland’s banking debt would be considered as eligible.
“Germany rules out completely retroactivity, and we are not alone in this,” he said.
Asked if Germany would ever change its position, the spokesman said that perhaps in a few years time if the recession was over and the markets calmed and there was no demand for the ESM funds, it “might consider it then”.
The Taoiseach said that he hoped the agreement of last June where Ireland’s unique circumstances were mentioned would count in the argument. “We will let that develop,” he said.
Germany fears that refunding Ireland the money it put into its pillar banks, mainly from the National Pension Reserve Fund, would create a precedent and lead to Spain and France making similar demands.
However, also Berlin has a long memory and continues to blame Ireland for many of the banking problems.
“They remember when the bank guarantee was introduced without anybody being consulted,” he said.
They also believe the poor supervision of banks in Ireland led to the downfall of some German banks which the German taxpayer then had to bail out.
EU leaders may now feel Ireland has got enough with the deal on the promissory notes and view the liquidating of IBRC as making the promissory notes worthless and bouncing the ECB into the deal.
However, Mr Kenny said he did not see this as diminishing the chances.
EU officials have been anxious to point out that the fund — to which Ireland will contribute €11bn — is limited and they do not want it to be dispersed bailing out banks that have already been rescued.