Fine Gael TD calls for bank debt writedown

Peter Matthews makes the point  “there is no justification for austerity.”

http://www.irishexaminer.com/ireland/politics/fine-gael-td-calls-for-bank-debt-writedown-197190.html

Wednesday, June 13, 2012

A Fine Gael TD has insisted the Government must seek a writedown of Ireland’s bank debt, in a direct contradiction of the Taoiseach’s stance on the issue.

Enda Kenny has thus far refused to seek any reduction of the bank debt, and is instead seeking alternative ways to ease the burden, such as a lower interest rate.
But Peter Mathews said the Government simply had to go back to the EU and the ECB and seek a writedown. "I’ve been emphasising the need to bring it to Frankfurt and to Brussels — that it is only right and just that we would insist on a writedown of the debt that has now fallen on the people of Ireland."
Mr Mathews made the comments during an interview about the bailout on BBC Radio 4.

He said there was "no justification" for the austerity being inflicted on Irish citizens as a result of the bank bailout.
"There’s no justification for it, and in fact, by allowing that to happen and by bearing with it, we, actually in Ireland, saved the euro, because if there had been collapses of the investing funds and banks in our banking system — if they had taken losses up to a level of around €70bn — there would have been many more banks going bust across Europe."

He said the rules of the EU and ECB had to be amended to allow for a writedown of the debt.
"What needs to be done is a setting aside or a rearrangement of the rules of the ECB and the EU, which would agree that the liability of our banks could be written down."

He said he was "glad to see that our Taoiseach... on the day after the referendum result, was straight onto Angela Merkel to put that case".
But a Government spokesman yesterday reiterated that the Taoiseach has not sought and is not seeking a writedown of the debt.
Instead, Mr Kenny is seeking to lengthen the term of repayment, reduce the interest rates attached to the debt, or find some other way of easing the burden.

The Government yesterday released the text of the letter which Mr Kenny wrote to Ms Merkel and other EU leaders following the yes vote in the fiscal treaty referendum.

In the letter, Mr Kenny says: "The solution is, in Ireland’s view, to accelerate moves to develop a joint response to the banking crisis in Europe."
But in addition to not requesting a writedown of the Irish debt, the letter does not spell out what the Government is actually seeking.

Mr Kenny’s spokesman said the letter was a general letter to EU leaders on the European crisis and "wasn’t designed" to go into specifics on Ireland.
The spokesman said it was possible Mr Kenny had gone into more specifics in his telephone call with Ms Merkel following the referendum result.
But he said Mr Kenny was not going to discuss the detail of that call in public, suggesting it would be "irresponsible" to negotiate through the media.