Tánaiste Eamon Gilmore has described the bank debt deal as a great day for Ireland and an opportunity for the economy.
“This package of measures will make a marked difference to Ireland’s debt sustainability,” he said.
Ireland's borrowing requirement would be reduced by €20 billion over the next 10 years, he told the Dail.
“We will reduce our deficit by an annual figure of €1 billion from 2014. We are tearing up the promissory note and we have wiped Anglo Irish Bank off the map.”
Mr Gilmore said when he worked as a trade union official he had learnt early on to never organise an ice cream strike in winter. “When you’re in negotiations, don’t play your hand until your hand is strong. We knew and understood that we first had to repair Ireland’s reputation abroad," he said. “The Government made it clear that we were willing to deal with our own problems but were carrying an unacceptable share of other people’s problems."
Fianna Fáil leader Micheál Martin gave a conditional welcome to the deal and said Ireland deserved a significant easing of the burden of its banking debt. He said ECB and EU had changed their positions in the last two years from a policy since 2008 of avoiding contagion. The ECB governor Mario Draghi had made a difference as well in terms of his more pragmatic approach and that had changed the atmosphere across Europe.
He pointed out that Ireland was sticking to the bailout programme, despite condemnation of that plan, agreed by the then Fianna Fáil-led government.
He acknowledged it will improve the cashflow position and Ireland’s funding position. But he asked what difference will the deal make to the overall stock of Government debt. “It would appear that none is the answer,” he said. “Do we owe as much today as we owed yesterday?
However, Sinn Féin finance spokesman Pearse Doherty attacked the Taoiseach over the deal. “You have said to every man woman and child in this State is that they will pay back every single penny of the toxic tax Anglo debt, a cost of €14,000 for every man, woman and child in the State."
The Government is replacing a promissory note with a sovereign bond of €28 billion with no write-down whatsoever, he said. “So much for the declaration of separation of toxic bank debt and sovereign debt,” he said. “This week my youngest son began to crawl. He wasn’t even born at the time the promissory note was issued by Micheal Martin and his Cabinet colleagues yet he will be 40 years of age and the State will still paying back the toxic debts of Anglo Irish Bank."
Independent TD Mattie McGrath said he hoped when Government TDs returned to their constituencies they would still think it was such a good deal or would they be laughing on the other side of their faces. “When is a deal not a deal?” he asked. “This clearly is not a deal.”
He said the Minister for Finance and his officials had worked hard but they had not got a deal. “It’s a copout.”
He said a child born today would in 2038 get a present of “a noose around his or her neck because the debt was being kicked the can down the road”. Mr McGrath said he looked across the Cabinet and he didn’t see one businessman there and this was shown in the deal done.
United Left Alliance TD Richard Boyd Barrett described the deal as “just another Government attempt to hoodwink the people” which would “ensure that cuts and austerity will continue to be imposed on ordinary Irish citizens for years to come to pay Anglo’s gambling debts”.
Speaking outside an EU event in Dublin Castle this morning, Minister for Social Protection Joan Burton said the Irish people can be “optimistic” the agreement reached with the ECB would lead to a “better budget” later this year.
Asked whether the deal would give the people a “break” in the budget, she said it was too early to say.
“However what I can say is that in any debt structure if you get a deal which allows you to make your debt sustainable, inevitably from a financial l point of view that gives you room to breathe, room to grow and my hope and expectation is that this deal is part of us achieving that.
“We can be optimistic that the ECB can recognise what the Irish people have done and achieved and can also recognise that making Ireland sustainable and being able to access market finance at reasonable rates, all of those things are what makes the economy grow and recover and that is what will make the next budget better.”
Minister for Jobs, Enterprise and Innovation, Richard Bruton said however the question of whether the budget would be less harsh than it would otherwise have been would be decided “in consultation with the troika”.
The deal made the trajectory towards restoring confidence in the Irish economy easier.
“The big change here is we bring down our borrowing levels overall so it will be easier for us to get to the three per cent target that we have to reach by whatever date it is. This brings that target closer,” he said.
“Whether it makes this year's budget easier is a question that obviously Ministers have to decide, that Government has to decide in consultation with the troika. The objective here is to have a more sustainable path and that's why this has been so important. It makes our trajectory more sustainable it makes it easier to get to those points where we have restored confidence in our economy.”
