Noonan ‘Confident’ on Anglo Deal as Draghi Signals Goodwill
Irish Finance Minister Michael Noonan said he’s “pretty confident” of reaching an agreement to allow the state to avoid a 3.1 billion-euro ($4.1 billion) payment due to former Anglo Irish Bank Corp. next year.
“It’s not done yet,” he told Dublin-based broadcaster RTE today. “I don’t want to pre-announce or anything like that.”
Noonan is in talks with the European Central Bank about replacing 30 billion euros of so-called promissory notes used to rescue the bank in 2010. ECB President Mario Draghi said today in reply to a question on a possible accord, that while the central bank can’t do anything that would be viewed as monetary financing, “other than that there is plenty of goodwill.”
Noonan said in October that there is “plenty of room for negotiation” for refinancing the promissory notes without getting into monetary financing. The Irish government has said it doesn’t want to make the next Anglo Irish payment due in March, making that the deadline for an accord with the ECB on refinancing the lender’s bailout.
Irish Prime Minister Enda Kenny said today that the country’s European partners have pledged to cut the cost of the nation’s bank bailouts through renegotiations. Ireland has injected or pledged about 64 billion euros to rescue its financial industry including Anglo Irish.
Ireland yesterday unveiled its budget plans for next year, with planned savings of 3.5 billion euros through higher taxes and spending cuts. Draghi at his regular monthly press conference in Frankfurt welcomed the measures.
“The new budget is a reaffirmation of the successful commitment of the Irish government in restoring sound economic conditions, both fiscal but also more broadly structural conditions,” he said.
Noonan said yesterday that the promissory notes are not a budgetary matter and he wouldn’t have made an announcement on Anglo Irish yesterday even if a deal had been reached.
Irish authorities favor using government bonds to restructure the rescue of Anglo Irish, renamed Irish Bank Resolution Corp., to ease pressure on the state over the next decade, two people with knowledge of the matter said in September. Under the plan, the state would inject as much as 40 billion euros of notes of as long as 40 years in maturity into banks.
To contact the reporters on this story: Finbarr Flynn in Dublin at email@example.com
To contact the editor responsible for this story: Douglas Lytle at firstname.lastname@example.org