Irish Republican News · June 8, 2012
[Irish Republican News]

[Irish Republican News]
Referendum result hits bank debt negotiations

European officials have already taken advantage of last week’s 26-County referendum result by curtly dismissing calls by Taoiseach Enda Kenny for a new deal on the state’s banking crisis.

Following the 60% to 40% victory in the ballot on the Fiscal Austerity Treaty last Friday, German officials quickly moved to counter Irish efforts to raise the bank debt issue.

EU support for tackling Ireland’s bank debt looks increasingly unlikely after Euro officials said it would be a “negative signal” to reopen Ireland’s bank rescue arrangements.

“We see no need for movement at the moment,” said Martin Kotthaus, spokesman for German finance minister Wolfgang Schaeuble.

Kenny later admitted that a deal on bank debt is unlikely to happen this month despite the passing of the referendum.

The guarantee of the state’s collapsed banking system, introduced by the Fianna Fail-Green Party coalition in 2008 and extended by the current Fine Gael-Labour Party government, has already addled the state with private bank debts of 64 billion euro. The current government has continued to repay almost all of these private debts, which are owed to a variety of international banks and global investment funds, despite intense public opposition.

Kenny, Finance Minister Michael Noonan and Fianna Fail leader Micheal Martin have all insisted the repayments are necessary to underpin confidence in the euro currency, in the European banking system and in the 26-County state itself.

The Taoiseach raised the bank debt issue with German chancellor Angela Merkel as early as last Friday, when the referendum votes were being counted, but Kenny’s interpretation of the fiscal treaty result as a “message” for a “just” debt deal was quietly ignored.

The issue of the bank debt in the ongoing negotiations had been flagged by Declan Ganley’s Libertas organisation.

“If Berlin had any respect for the Irish government, they wouldn’t have handed the Irish ‘No’ side such a gold plated ‘told you so’ moment within just three days,” he said.

The European Commission also saw the 26-County State’s endorsement of the treaty as a reason to suspend negotiations on Irish debts.

“It’s a further commitment but it has nothing to do with the work that Ireland is doing with the help of the troika,” said a commission spokesman.

Sinn Fein President Gerry Adams challenged the Taoiseach in the Dail to fulfil his promises to lift the burden of the banking debt from Irish citizens and to initiate genuine job stimulus projects.

He called for “a serious political effort” to secure a write down of bad banking debt. “If you don’t seek a debt write down - you won’t get one,” he said.

Sinn Fein also pointed to the increase in unemployment as a testimony to the effects of the austerity program on the economy. The latest survey showed this week that there was a decline in employment of over 18,000 jobs across the 26-County state in the past year.

Deputy Peader Toibin said: “These figures are a shocking indictment of a government which fought an election campaign and then a referendum campaign on the basis of jobs. It puts pay to the nonsense of the vacuous spin that jobs are a priority of this government.”

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© 2012 Irish Republican News