The Government is on the verge of a deal with the European Central Bank which is expected to ease the terms of the burden of the country’s bank debt.
Emergency legislation is being rushed through the Dáil and Seanad tonight with both Houses sitting into the early hours to pass a Bill allowing for the liquidation of Irish Bank Resolution Corp (formerly the failed Anglo Irish Bank).
Copies of the Irish Bank Resolution Corporation Bill 2013 was given to TDs via their pigeon holes in Leinster House shortly before 10.30pm. Opposition finance spokespersons have been briefed on the Bill.
According to the Explanatory Memorandum the aim of the Bill is to wind up the IBRC, end the State’s exposure to the IBR and assist with the restoration of the financial position of the State.
Government sources expressed confidence tonight that the legislation would pave the way for a deal which will amount to a major improvement in the terms of the promissory notes.
“This is the most important night in Irish history since the decision to guarantee the banks in September, 2008” said one Minister.
However, when the Dáil met at 10.30pm Government chief whip sought an adjournment until 11 pm and that was agreed by the House. At the resumption of the debate at 11pm Fianna Fáil party leader Micheál Martin called for an adjournment in the debate to allow deputies to read the legislation. Taoiseach Enda Kenny agreed to postpone the Dáil until midnight.
Mr Martin said the Irish Bank Resolution Corporation Bill was being put before the House, without anyone on the opposition benches having read it.
"There is something fundamentally wrong in asking TDs to pass something that they had not read, for even 10 minutes," he said, calling for an adjournment for a basic reading of the Bill.
Mr Martin said he was not questioning the bona fides of the Minister for Finance but the Bill would have a grave impact on individuals and it was unacceptable to ram this through without any consideration in terms of the detail of the Bill.
Sinn Féin leader Gerry Adams said they had been promised a new way doing business and this was probably one of the most important bills to go through the Dáil.
"The Government would either get a write down of debt or were going to saddle our children, our grandchildren with the debt forever more," he said.
He called on the Government not to commit the same sin it had accused its predecessors of doing in ramming through legislation.
United Left Alliance TD Richard Boyd Barrett said the State was bankrupted because of decisions made in the early hours of the morning.
"We are talking about a Bill dealing with assets worth about 40 billion," he said.
"Finance spokespeople were briefed on the Bill for about 15 minutes," he said and "you are seriously suggesting we can make an informed decision?".
Taoiseach Enda Kenny said the Bill had been planned for quite some time and the Cabinet met last night to approve it. "This Bill gives legal certainty to the protection of these assets for the State and for our people," he said.
President Higgins returned from a visit to Rome on the Government jet earlier tonight to be in a position to sign the bill into law once it was passed both both Houses.
It is expected that the deal that emerges tomorrow will involve the issuing of long term bonds by the Central Bank which will involve repayment of interest over a period of thirty four and a half years.
IBRC chairman Alan Dukes confirmed earlier this evening that "the board is liquidated as of now, the functions of the board are being taken over by KPMG.”
KMPG's Padraic Monaghan has been given responsibility for running IBRC's board, but has not been appointed liquidator. Staff at IBRC were informed of KPMG's appointment by email this evening. A liquidator is expected to be appointed imminently.
The general secretary of the Irish Bank Officials Association Larry Broderick is seeking an urgent meeting with the Minister for Finance and the liquidators to clarify the future of the IBRC’s workforce.
"We appreciate that the main focus of attention on the IBRC liquidation will be on its potential impact on the promissory note issue. However, around 1,000 workers currently employed by IBRC employees are fearful that they may be overlooked completely or at best regarded as 'collateral damage' in this situation," he said.
He also added a note of caution about rushing through legislation on banking. “The last occasion – to enact the bank guarantee – does not offer a positive precedent. I hope that this time sufficient consideration has been given to all of the potential downsides as well as the upsides to the new proposition – for everyone’s sake," said Mr Broderick
Central Bank governor Patrick Honohan, who sits on the ECB's Governing Council, put the plan involving the liquidation of the IRCB to his fellow central bank governors at a meeting in Frankfurt yesterday.
A decision was expected last night but a final decision on the Irish proposals was adjourned until tomorrow.
Under the plan Mr Honohan has presented, the IBRC - which was set up to manage the wind down of Anglo Irish and Irish Nationwide - will be liquidated so that the Government no longer has to make annual interest payments of over €3 billion on the €31 billion promissory note used to bail out Anglo.
Most of IBRC's balance sheet will pass to the Central Bank, as it enforces collateral used by IBRC to secure more than €40 billion of Central Bank funding, the source said.
Those assets will include a number of long-term Irish government bond which will be used to replace the current promissory note. The longer-term bonds will mean that Ireland can make the payments more gradually. These bonds will be held by the Central Bank.
The Government is desperate to avoid having to pay the €3.1 billion a year until 2023 to service the notes issued to underwrite Anglo and has been in talks for some 18 months.
Fianna Fáil finance spokesman Michael McGrath said if speculation is correct and the Government is to strike a deal, its success would be measured by the impact on the general public.
“The question is how will this impact on the budget? I believe, and I’ve said this a number of times, a good deal could have a very tangible impact on the next budget
