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Noonan: Next step bank/sovereign split

Friday, February 08 15:54:16

Ireland will now embark on a campaign to have Europe's leaders stick to their promise made last June of separating Irish banking and sovereign debt through support from the ESM, Finance Minister Michael Noonan said today.

But he said that this could only happen in tandem with the establishment of a banking union and he does not see this happening this year.

Speaking on RTE Radio, he said that the Government would have been in a bad position had the deal not been agreed with the ECB.

Mr Noonan said that while the Government had been close to agreeing the arrangement with the ECB, it was not certain until lunchtime yesterday.

"We would have been in a situation, having liquidated (IBRC) and incurring the cost associated with that, if we hadn't the benefits from the other side of the arrangement," he said.

Tanaiste and Minister for Foreign Affairs Eamon Gilmore said that the next step in "lifting the burden" of bank debt off Irish taxpayers was dealing with Ireland's legacy bank debt.

Speaking on Morning Ireland, Mr Gilmore said this would involve looking at how the European Stability Mechanism can be used to recapitalise the banks.