Harry McGee in Irish Times on Anglo Promissory Notes. I say whisper into their ears – We won’t pay because we are only bailing you out and we don’t have €16 billion for 20 years to give you.

Shift in focus on Anglo promissory notes

HARRY McGEE Political Correspondent

THE GOVERNMENT has quietly downgraded its campaign to persuade the
European Central Bank to change the terms of the €30 billion of
promissory notes it issued to bail out Anglo Irish Bank, according to
an authoritative Government source.

The efforts by Minister for Finance Michael Noonan to seek a reduction
from the ECB in the 8.2 per cent interest rates being charged on the
notes or extend the term of the loan has not really worked, said the
source. In all, Ireland will have paid a total of €16.8 billion in
interest when the debt matures in 20 years’ time.

It is understood the lack of headway with the ECB was a motivating
factor for Taoiseach Enda Kenny bringing up the issue of Ireland’s €63
billion bank recapitalisation bill at the EU summit last weekend. The
Taoiseach asked other EU leaders to allow a more sustainable way for
Ireland to pay back the loans it has taken.

The Department of Finance said this week talks were continuing at
official level with the ECB. However, the source said politically, the
Government was not optimistic about a positive outcome.

When Mr Noonan first broached the issue with Jean-Claude Trichet in
September, the Minister for Finance conceded that the then head of the
ECB had been “pretty non-committal” on the promissory notes issue.

The source said while the Taoiseach had talked about a total of €63
billion, what was really at issue were the promissory notes for Anglo
and Irish Nationwide.

“We will talk with the EU Commission and with the council secretariat
about this issue rather than with the ECB,” said the source.

Mr Kenny has consistently said the €63 billion was borrowed before the
EU-IMF bailout programme in November 2010. Department of Finance
figures this week confirmed he has not been strictly correct in that
assertion. An analysis shows only €42 billion of the €63 billion was
borrowed as €21 billion came from the National Pensions Reserve Fund.