Monday, February 18 17:53:34
"Mario Draghi has just cast a dark shadow on Ireland's promissory note deal," according to independent MEP Marian Harkin today.
This follows the appearance of European Central Bank (ECB) President Draghi before the Economic Affairs Committee of the European Parliament today.
"President Draghi has just stated that ECB will need to assess compliance of Ireland's promissory note deal with article 123 of the Lisbon Treaty. This article prohibits the ECB from extending any kind of overdraft or credit facility to EU Member States".
"It is quite clear that Draghi and the ECB have not assessed the Irish move and he stated quite baldly that if the deal with the Irish Central Bank does not comply, we will need to see what legal remedial action needs to be taken".
"This is a very worrying development which gives further oxygen to the comments by Jens Wiedmann, President of the German Bundesbank, who expressed his unhappiness with the deal. He said that it 'blurs the clear line between monetary and fiscal issues'".
"Of greater concern is what happens next - the deal on the promissory notes cannot be undone, the eggs have been broken and the omelette is made, but what if any leverage can the ECB apply?"
"It is crucial that the Irish government stays the course, any sale of the holdings of government bonds held by the Central Bank before the allotted time would significantly undermine and benefit the Irish taxpayer would get from the deal".
"Yes, we have certain obligations as to when we sell those bonds but any sale in advance of that timetable would be a disaster for Ireland."
"The ECB leaned on us once and helped bring Ireland to the edge of the precipice. Now that we have taken one step backwards, we cannot be pushed again," the Ireland North and West MEP concluded.