Minister for Finance Michael Noonan has said Ireland has no option but to pay €1.25 billion today to unsecured bondholders of the defunct Anglo Irish Bank.
This morning, Occupy Dame Street activists locked down the Department of Finance today in protest against repayment.
The ECB has ruled out forcing losses on senior unsecured and unguaranteed bondholders at the former Anglo Irish Bank as it would damage confidence in the Irish banking system and could be “very costly”.
The National Treasury Management Agency (NTMA) will today dip its toe into the bond market for the first time since September 2010. Success will be seen a major boost to the economy and likely increase the chances of exiting the EU-IMF bailout on schedule.
Speaking on his way into Government Buildings this morning, Mr Noonan said not paying bondholders at the nationalised bank, now known as the Irish Bank Resolution Corporation, could cost the country more in the long term.
“Nobody likes doing it, but it is worth noting first of all that it’s not an additional charge for the Government,” he said. “It comes from what happened in the last government when they decided in the first instance to guarantee the banks and secondly, to nationalise Anglo Irish Bank.”
Taoiseach Enda Kenny said he did not know the identity of the bondholders receiving the €1.25 billion from the State today. “I do not have a list of names…I am quite sure that those who are in possession of these bonds…that their names have changed quite considerably since they first acquired them," he told the Dáil.
Earlier, Minister for Justice Alan Shatter said Ireland needs to ensure its return to markets and exit from its bailout.
"It is part of what we have to do to restore the fiscal reputation of our country," Mr Shatter told RTÉ. "Defaulting on this debt could do substantial damage to our capacity to essentially escape from dependence on funding from the IMF and the ECB, we need to get back into the markets," he said. "Meeting this obligation is a very clear sign that this state can be relied upon to pay its debts.”
The State’s borrowing costs fell significantly yesterday as discussion on the possible easing of bank-related public debt took place with senior EU officials.
Mr Noonan met European Central Bank president Mario Draghi and EU economics commissioner Olli Rehn yesterday to request measures to cut the cost of Ireland’s €63 billion bank rescue. He said last night it was too early to say whether a successful outcome was in prospect and the EU authorities have adopted a non-committal response.
The Government wants to replace an expensive promissory note scheme used to recapitalise the former Anglo Irish Bank with less expensive financing, possibly via a new aid package from the European Financial Stability Facility rescue fund.
Up to a dozen protesters have chained themselves together with special locking devices around the entrance of the Department of Finance. Steven Bennett, spokesman for the movement, warned that it could take hours to cut through the locks.
He said the building could be shut down all day. “We have been here since 6.30am this morning and we have a crowd of about 40 protesters,” said Mr Bennett. “We’ve used special locks that are kind of half-bells filled with concrete and other additives so it’s going to take hours and hours, and special cutters to get through them.”
Additional reporting: PA
