Mary Lou McDonald
Question:96. Deputy Mary Lou McDonald asked the Minister for Finance if he has met with the Ballyhea says No Group and examined their proposals for economic recovery. [23946/13]
View answerTuesday, 21 May 2013
Questions (96)
Written answers
I have not met the Group referred to by the Deputy. On 12 March 2012 I wrote to Mr Diarmuid O’Flynn, a member of the group referred to by the Deputy. In that letter I made the following points to Mr O’Flynn:
1. Reputation, reliability and commitment were essential elements to regaining our financial independence and that reneging on senior debt would not enhance the Irish position and may put contagion pressures on eurozone countries.
2. If we were to postpone or suspend payment to creditors in IBRC this would have a significant impact on both the Bank and ultimately the State in that it could lead to the Bank becoming insolvent with an increase in the cost to the state to resolve IBRC and the financial market’s view of Ireland as a place to do business or invest would be seriously undermined.
3. The value of support we receive from our European Partners far outweighs any short term gain from imposing burden sharing on the bonds in question in the face of European opposition to such a move.
However as I have said in my letter to Mr O’Flynn I was eager to have Promissory notes examined to see if they could be re-engineered in a better way for the State. The promissory notes were replaced with a portfolio of Government bonds in February 2013. This may not have been possible had I followed the recommendations set out by the Group referred to by the Deputy in her question. The provision of a longer term non-amortising (up to 40 years) portfolio of Government bonds to replace the amortising Promissory Notes which occurred in February 2013 will have benefits from a market perspective as it ensures the liability to repay is beyond most credit investors’ time horizon. This transaction was noted by the ECB.