Belfast Telegraph

Legacy debt deadline will be missed

A deadline for striking a deal on Ireland's legacy debt by mid-2014 will be missed, Taoiseach Enda Kenny has revealed.

While he insisted the nation will continue to fight European finance chiefs for the restructuring of its bank debt, he said complications inevitably arise.

"It won't be met. I wouldn't think it would be met, no," Mr Kenny said of an initial deadline.

"I always said in the latter half of 2014. Now, look I may be wrong here. When you sit around the table with 26, 27, 28 or 27 others, complications can arise from any point."

He said a commitment made by the European Council in June last year to retroactively recapitalise Ireland's banks should be stuck to.

But nothing can be done about it until the planned European banking union is in place.

A single resolution mechanism has been proposed for the banking union, which is intended as a central pot of funds for failing banks in the Euro area.

Ireland had hoped to use its six-month term as EU president in the first half of this year to secure a deal on its 64 billion euro debt - a burden that Irish taxpayers have been forced to shoulder.

Top EU officials, including European Council president Herman Van Rompuy and president of the European Commission Jose Manuel Barroso, previously gave their full support to Ireland's efforts to secure a deal.

If secured, it could lead to the restructuring of its debts and ultimately lessen the financial burden on taxpayers.

"Ireland obviously had to borrow very extensively when this happened in the first place," the Taoiseach said.

"That's why Ireland is mentioned specifically in the decision on the 29th of June and that has been recognised by a number of influential European leaders recognising that this country had a very particular special circumstance and that should be recognised in the way that this would be treated.

"So, that's the position that has maintained since June of last year. I like to think the decisions the European Council makes in good opinion would be followed through.

"So, we haven't lost sight of that at all."

The once financially-crippled nation became the first eurozone state to have successfully completed an EU/IMF bailout when it emerged from the 85 billion euro programme on December 15.

Ireland's finances, budgets and policies had been under intense scrutiny since the country agreed to a massive loan package in 2010.


From Belfast Telegraph