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Merkel's friend dashes Irish bank hopes

Friday, July 25 14:13:07

Dr Joachim Pfeiffer, economic policy spokesperson for German Chancellor Angela Merkel's Christian Democrats, has poured cold water over Ireland's hopes of retroactive funding for Irish banks.

"There is no chance Ireland's legacy assets will be paid by the European Stability Mechanism (ESM). This instrument is only an instrument for emergency," he said.

He said that the European Stability Mechanism (ESM) can only be used for future banking debt issues and not legacy ones.

According to TheJournal.ie today, he said that he communicated this to Enda Kenny in a meeting yesterday but said the Taoiseach did not share his view.

"He said the instrument was put in situ - that it can be used. But from my point of view it's an instrument for the future," Pfeiffer said of Kenny's response.

The Government has been lobbying Europe for years to have at least some of the E25bn burden imposed on Irish taxpayers by the bailout of our banks.

The German politician said the rules governing the ESM regime had "already been decided" and that the E60 billion fund would only be used for future bank rescues. "If you look at the text, there is no possibility of retroactivity," Mr Pfeiffer said.

For more see: www.businessworld.ie