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Anglo payment of €3.1bn will go ahead this weekend

27 March, 2012 - by Pearse Doherty TD

Speaking from the Oireachtas Finance Committee this afternoon Sinn Féin finance spokesperson Pearse Doherty said that “on the basis of what Governor Honohan told us today, the government will pay Anglo Irish Bank €3.1bn later this week”.
The Committee was being briefed by governor of the Irish Central Bank on the on-going negotiations with the Troika on the restructuring of the Promissory Note debt to Anglo Irish Bank
Deputy Doherty said:
“Despite being constrained by the on-going negotiations Governor Honohan confirmed a number of crucial details about the proposed deal on the 2012 promissory note payment of €3.1bn due to be paid later this week.
“We now know that the government will transfer €3.1bn of taxpayers’ money to Anglo this month, contrary to the claims made by the Minister for Finance last week.
“We also know that the deal involves Anglo using that money to purchase a long term Irish Government bond, the interest rate will be at market rates somewhere in the region of 7%.
“The governor also confirmed that this arrangement would have no positive impact on the government’s budgetary position in 2012. This means that there will be no real benefit to ordinary citizens suffering under the weight of government and Troika austerity.
“The governor also indicated that the overall deal under consideration will not be concluded for several more months, will not involve any write down in the principal debt to Anglo and may lead to an increase in the states debt-to-GDP ratio.
“It is clear from what we have heard today that the deal currently being negotiated by the government and the ECB will have no positive impact on the lives of ordinary people this year or next. It will not help the government get the immediate deficit under control or get the debt-to-GDP-ratio to sustainable levels.
“Of course the refusal by the government to even ask for a debt write-down always meant that this deal would be disappointing. The Minister for Finance’s intervention in the Dáil, raising expectations of a significant deal, will make this disappointment all the worse. It is clear that the government has wasted a real opportunity to secure a write-down on this odious debt itself, something that the deal if agreed will make impossible in the future.”

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