Plan to burn bondholders 're-statement of Govt position'

A junior minister at the Department of Finance is defending the timing of the announcement that the Government wants to burn senior bondholders at Anglo Irish Bank and Irish Nationwide.

The news came from New York yesterday, after Finance Minister Michael Noonan met with the IMF - but now he's looking to Europe for backing.

Anglo and Irish Nationwide have €3.5bn worth of unsecured debt between them.

This morning Minister of State for Public Service Reform Brian Hayes played down any suggestion that the European Central Bank could see the announcement from Minister Noonan as a snub to their position.

He said the announcement was simply a 're-statement' of the Government's stance all along.

"The minister's view, and the Governement's view, is that this issue should be tested again," Minister Hayes said.

German Chancellor Angela Merkel is due to attend a press conference with the European Central Bank later today.

It is thought we could get the first indications of a response to Minister Noonan's announcement then.