The Irish Examiner view: EU solidarity tested like never before

Jean-Claude Trichet: warned Finance Minister Michael Noonan that “a bomb would go off in Dublin”

Even the most ardent Irish Europhile must recoil when they recall the brutal application of power by then ECB president, Jean-Claude Trichet, who, in March 2011, warned Finance Minister Michael Noonan that “a bomb would go off in Dublin” if he, as any rational person would have, imposed losses on senior bondholders — the financiers whose gambling all but made our banking crisis inevitable.

Mr Noonan told the 2015 banking inquiry his position was clear and that burning bondholders would have been better for our economy. However, after Mr Trichet’s ultimatum, that option was unavailable. At that time, he suggested the bailout would cost up to €35bn, but late last year, the Comptroller & Auditor General put that bill at €41.7bn. The C&AG said it adds €1.3bn to annual debt-servicing costs. It is a real imposition and shows how vulnerable we are in the absence of peer solidarity. Mr Trichet’s position undermined Irish trust and faith in the EU in an unprecedented way.