Merkel doesn’t rule out legacy bank debt deal

German chancellor Angela Merkel did not rule out Ireland getting money back for bailing out its banks when she held a joint press conference with Taoiseach Enda Kenny in government buildings.

Earlier, she had listened to a speech by U2 singer Bono who insisted the “Irish people bailed out the Irish people” having been bullied, and that the recovery had come about despite the troika rather than for them.

Germany has consistently fought against EU rescue funds being used to retroactively fund Ireland for its massive bank bailout, but Ms Merkel said she wanted to pay her respects to the Irish people for “embarking on the very difficult course”, and succeeding.

She described the fact that the cost of Ireland’s borrowing had come down so much and that Ireland had emerged from the bailout as a ‘tremendous success story”.

Asked if Ireland had a legitimate claim for a deal on the legacy bank debt, Ms Merkel did not answer directly but said the work on creating a banking union had still not been completed.

“All that is currently in the consultation process and I can only say that I have a positive outlook on the possible outcome.” she said.

Mr Kenny said that nothing could be done until the ‘single supervisor’ was in place.

“From that time on, it will be on a case-by-case basis as was agreed in 2012”, he said in the statement agreed by EU leaders in June 2012.

It said: “The eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme”.

The single supervisory mechanism that underpins banking union is due to be in place towards the end of the year, after which the EU’s bailout fund the ESM will be in a position to provide funds to bail out banks rather than taxpayers having to foot the bill as happened in Ireland.

The Taoiseach was put on the spot on corporation tax with the latest revelations about Irish-based multinationals paying very little tax despite making billions of euro in profit.

Mr Kenny repeated the Government case that Irish corporate tax is statute- based and the Government is co-operating with all the international bodies, including the OECD’s work on base erosion and profit shifting, and that companies were no longer allowed to be “stateless” allowing them to evade tax altogether under Irish tax rules.

Germany is one of the countries pushing to shut down what they see as tax loopholes in countries’ tax rules that means they pay less in their home country.

Mr Kenny and Fine Gael hosted the European People’s Party, the centre- right grouping to which Fine Gael belongs. The congress selected former Luxembourg prime minister Jean Claude Juncker to head its European election campaign. If the party wins the most seats in the May vote for the parliament its candidate will be the most likely person to take over as president of the European Commission.

The Socialists, currently the second largest in the Parliament, has German MEP Martin Schultz as its lead candidate.