Promise on bondholders: Not a single red penny

Taoiseach Enda Kenny’s declaration yesterday that investors who hold junior Anglo Irish Bank debt will not be repaid in “any circumstances” will be widely welcomed — even if it has an air of déjà vu about it.

Coming, as it does, in the closing part of the electoral cycle, any climbdown, any concession, even if forced on Mr Kenny from Brussels, would have catastrophic consequences for his Government’s re-election prospects.

Once bitten, twice shy and all that.

Coming, as it does, on the eve of the protests against water charges, however big or moderate they prove to be, there is a particular sharpness and relevance about this unambiguous line in the sand.

It would be unconscionable if those who bankrolled our casino bankers — and those heroes are probably playing golf in Spain today before enjoying a nice lunch beside the villa pool — were paid while social, health, and education services are cut to the bone.

One of the hard lessons of the economic collapse is there are two types of risk — the risk individuals or businesses assume when they borrow money and the risk banks take when they lend money.

To use a phrase from another sphere, these are hardly arrangements based on parity of esteem.

Bondholders who recklessly supported rogue bankers can expect little sympathy.

Nevertheless, Mr Kenny may have given a hostage to fortune.

If he is forced to retract, then a lot more than his political prospects will have been destroyed.