Belfast Telegraph

Van Rompuy supports bank debt deal

Ireland's position as a special case for securing a deal on crippling bank debt has been restated by the president of the European Council.

As the first high-level meeting of Ireland's six-month EU presidency got under way, Herman Van Rompuy insisted breaking the link between sovereign and private debt would be a top priority.

"One of the key objectives is to break the vicious circle between banks and sovereign - especially for Ireland," Mr Van Rompuy said.

The top EU official gave his full support to Ireland's efforts to secure a deal, which could lead to the restructuring of its debts and ultimately lessen the financial burden on taxpayers. He said pressing ahead with the establishment of a banking union across Europe would help achieve this.

Taoiseach Enda Kenny insisted Ireland would take advantage of its presidency term and use it to push for the deal, which he hopes will cover legacy debt.

"Clearly that's of importance to us. The particular issue, the question of legacy assets and legacy debts," Mr Kenny said. "These particular circumstances are unique circumstances in which Ireland finds itself in and we are the only country with these circumstances."

European heads of state agreed at a crucial meeting on June 29 last year that the sustainability of the Irish bailout programme would be improved. Mr Kenny went on to clash with German chancellor Angela Merkel over whether that assurance included allowing Ireland access to a pot of emergency funds - the European Stability Mechanism - to pay off its legacy bank debts.

The German boss had claimed that any money used to ease Ireland's bank burden would apply only to future debts, but in a follow-up joint communique with the Taoiseach, she later insisted Ireland would be a "special case" in dealing with its 64 billion euro legacy debt.

Elsewhere, Mr Van Rompuy praised Ireland's efforts in its recovery from the economic crisis.

"You are taking over the presidency in challenging times for Europe. You are a good example to all on how to handle the economic crisis," he said. "Through painful but unavoidable efforts, you have consistently met all of your targets and, more importantly, you are creating your own potential for jobs and growth."


From Belfast Telegraph