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Noonan must admit he has mishandled promissory note arrangement – Doherty

30 March, 2012 - by Pearse Doherty TD

The Sinn Féin finance spokesperson Pearse Doherty TD said today that the Minister for Finance Michael Noonan must admit he has mishandled the promissory note arrangement.

Doherty said the Minister and his cabinet colleagues had built up an expectation that a deal would be done on the notes, but as yesterday's news is digested it is apparent that by any measure, the outcome of six months of negotiations on the promissory notes has to be deemed a failure.

The arrangement has not reduced our debt, not reduced our deficit and not reduced our liability to Anglo.

The Donegal TD said this contrasted starkly with how the government tried to spin the arrangement yesterday.

Doherty said:

“Yesterday Minister Michael Noonan interrupted the business of the Dáil to make an announcement on the promissory notes in which he claimed there had been a successful outcome of negotiations. No opposition response was allowed in the house and sparse information was provided other than the Minister’s statement.

“It has transpired over the past 24 hours that not only has the Minister abjectly failed to seek a restructuring of the promissory notes, but that even the movement it claimed to have achieved is a jumbled up mess of accountancy trickery and additional costs, with some crossed fingers thrown in. The fact that the Bank of Ireland shareholders have not agreed to take the government bond yet is proof of this.

“Here are the facts - the government, after climbing through a number of elaborate hoops this weekend, will ensure that the €3.1 billion due to go to the Irish Central Bank via IBRC to be burnt, will in fact be paid and go to the ICB to be burnt. The money will come from NAMA and then the BoI, but it will be paid, while they hold onto the government issued bond. The ECB's statement last night confirms that they do not care what sort of additional chaos has been added to the situation by the Irish Government because the promissory note deal is being honoured as it was expected to be honoured.

“We now have the bizarre situation where Bank of Ireland will be looking to sell this bond back to IBRC next year, so this arrangement is not even pushing the debt out to the distant future, it is just deferring it for one year.

“Regardless of the outcome of future negotiations, Minister Noonan has completely mishandled this arrangement and this contrasts starkly with how he tried to spin events yesterday. There is no deal here. All of this arrangement rests within Irish institutions and it is questionable whether all of it is even agreed. When you ask yourself three questions - does this arrangement reduce our debt, does it reduce our deficit and does it reduce our liabilities to Anglo, the answer to all three questions is no. In fact it increases our debt and leaves us to find an additional €90 million in taxes and cuts this year. By any measure, this is a failed outcome to six months of 'negotiations' and yet Fine Gael and Labour claim yesterday was a good day for this state. On that basis, I cannot imagine what they would perceive as a bad day.”

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