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ECB u-turn hugely significant

16 July, 2012 - by Pearse Doherty TD


Speaking in response to news reports that the ECB governor Mario Draghi advocated burden sharing with senior bondholders during a Eurozone Finance Ministers meeting last week, Sinn Féin Finance spokesperson Pearse Doherty said that, “if true this is a highly significant u-turn by the ECB that could have enormous implications for the state’s debt crisis.”

Deputy Doherty said:

“Today’s newspapers are reporting that Mario Draghi told EU finance ministers last week that tackling the Spanish banking crisis will require burden sharing with senior bondholders. If true this is a highly significant u-turn by the ECB that could have enormous implications for the state’s debt crisis.

“Sinn Fein consistently argued that the taxpayer should not have to pay the costs of toxic private banking debt. From the very outset we argued that senior bondholders must bear the cost of the banking crisis. Many politicians and commentators ridiculed Sinn Féin for this.

“In recent months many key international players, including the OECD, the IMF and the European Commission have been coming round to Sinn Féin's view. Now it appears even the ECB accepts the logic of our argument.

“The Minister for Finance Michael Noonan was at the meeting last week at which Mario Draghi gave his briefing on the Spanish banking crisis. The minister should publically confirm whether the ECB has changed its tune. He should also outline his response to these developments.

“Crucially, if the reports are accurate, the minister needs to outline what the government intends to do to ensure that this change will be applied retrospectively to Ireland to reduce our unsustainable debt burden.” ENDS

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