The Government is of the view that it would not be in Irish interests to have AIB fail to meet a senior debt repayment obligation, be it to private investors or the Eurosystem. Furthermore and as the Deputy will be aware, any bank accessing standard or non-standard liquidity assistance from the European Central Bank is required to pledge collateral in return for funding. In any event AIB has an important mandate to supply credit and essential banking services across the country. It is important that its business model remain intact so that it can eventually regain access to international funding markets in a meaningful way and eliminate its dependence on the Irish state.
The Deputy will be aware that when this Government took office it attempted to enforce burden sharing with senior unguaranteed bondholders in particular institutions that were no longer core elements of the Irish financial system. Intensive discussions were held with our European partners and particularly President Trichet of the ECB in the run-up to the announcement of our stress tests on 31st March last year. At that time the President believed that such action was not in the interests of Ireland or the Euro Area. This matter was discussed again with President Trichet on a number of occasions including the Ecofin meeting in Poland in September 2011.
Nevertheless, I would like to again reiterate that this Government is currently in discussions with our European colleagues in relation to securing a deal on the Irish bank debt and further detailed work will continue to ensure that the positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer.
