Noonan Says Deal on Promissory Notes by March May Be ‘Feasible’

Irish Finance Minister Michael Noonan said the government aims to reach a deal by March to refinance promissory notes used to rescue former Anglo Irish Bank.

“On the promissory notes, the political timeline is to get a new arrangement put in place by March,” Noonan told reporters in Luxembourg today. “I hope the March date is feasible.”

Ireland seeks European Union help to refinance 30 billion euros ($39 billion) of promissory notes. It is also looking for EU aid in refinancing other bank debt, which Noonan said remains under discussion.

“Banking debt is falling into two fairly distinct areas of discussion -- the promissory notes on the one hand and the direct recapitalization of banks on the other hand,” he said.

The Irish finance minister said he’s confident the euro area’s firewall fund, the European Stability Mechanism, will eventually be allowed to recapitalize banks directly. EU leaders in June pledged to create a common euro-area bank supervisor as a precursor to allowing direct aid. Since then, officials have debated how that system would handle so-called legacy assets weighing down banks’ books.

“The policy position as set out by the heads of state of government on June 29th is the policy that prevails,” Noonan said. “We’ve had assurances of that from the commission and the authorities. I don’t think the issue of the legacy will be dealt with today.”

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