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Greek debt deal highlights continued government failure on Irish bank debt

27 November, 2012 - by Pearse Doherty TD

Speaking in the aftermath of the European Council agreement on the Greek debt Sinn Féin finance spokesperson, Pearse Doherty TD, said that “while there are many problems with the deal agreed for Greece last night it once again highlights the failure of the Irish government to secure any progress on our bank debt.”

Deputy Doherty said:
“Last night the European Council agreed a number of significant changes to the Greek bailout programme. They extended the maturities for up to 15 years, reduced interest rates on loans from member states and added an interest holiday of ten years on loans from the EFSF.

“While this may provide some comfort for the Greek government, it will not make their debt sustainable. That can only happen when the European Union agrees to write down a significant portion of the loans to Greece.

“However last night’s deal once again highlights the on-going failure of the Irish government strategy on banking debt. While the Greek government were able to secure extension of maturities and better interest rates on their debt, the Irish government appears unable even to agree a common position with the EU.

“Like Greece, a deal only involving reductions in interest rates and modest extensions of maturities will not significantly reduce the burden of banking debt currently on the shoulders of the taxpayer. Only a write-down on the capital portion of the debt will achieve this outcome.

“While the Greek government made some, if limited progress at this European Council meeting the on-going failure of the Irish government to make any comparable progress speaks volumes.

“While there are many differences between the Greek and Irish situations, the common thread is that our respective debts will only become sustainable when the EU agrees to a debt write down. In Ireland’s case that would take the form of a write down on the promissory note while in Greece it would be a write down on the EU loans.”

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