Sinn Féin criticises Anglo debt deal

The Government has been accused of accountancy trickery in a bid to fool the public into believing a deal on old Anglo debts is good for the country.

The Government has been accused of accountancy trickery in a bid to fool the public into believing a deal on old Anglo debts is good for the country.

As Finance Minister Michael Noonan said the source of low-cost funding for Ireland would be key to further negotiations on the €27bn left owed by the toxic lender, Sinn Féin said deferring repayments solves nothing.

Outside a summit in Copenhagen, the minister said talks would continue to secure lower rates on the remaining debt run up at the bank, now known as the Irish Bank Resolution Corporation (IBRC).

And he suggested access to emergency eurozone bailout funds would be key to any successful negotiations on Anglo.

“The European Central Bank would favour that because it would improve their collateral significantly,” said Mr Noonan.

“But that would be of little use to Ireland unless we got the commitment to ongoing medium term low-cost funding from the European Central Bank.”

However, Sinn Féin finance spokesman Pearse Doherty attacked the Anglo debt deferral deal announced yesterday.

He said arranging a new long-term government bond instead of paying off the €3.1bn promissory note, or IOU, would fail to reduce Ireland’s debt, deficit and liability to the former toxic bank.

“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,” said Mr Doherty.

Mr Noonan unveiled plans to defer the IOU payment to the IBRC with a bond.

The promissory note – or promise to pay – was due tomorrow but the new deal enables Ireland to spread out its debt repayments. Ireland ultimately pays more on interest rates but repayments will be less burdensome.

Mr Noonan also said it removed the need for the Government to dip into its €85bn bailout fund and pay cash but rather use a complex debt reschedule and money transfer.

Mr Doherty criticised this arrangement.

“We now have the bizarre situation where the 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,” he said.

The Donegal South West TD added that the deal represents six months of failed negotiations.

About €30bn was owed to Europe over the next 10 years in promissory notes – a type of State IOU or promise to pay signed by the previous government.

The former Anglo Irish Bank was nationalised in 2009 when the Government took on responsibility for its massive debts.

Mr Noonan confirmed at the meeting of European finance ministers that negotiations would continue to secure lower rates on the remaining €27bn.

The talks took place on the back of a statement from the European Central Bank which said it was important for Ireland to honour Anglo debts and that it expects future promissory notes to be paid according to the schedule the Government committed itself to.

Earlier, Public Expenditure Minister Brendan Howlin hailed the promissory note deal as good news for Ireland, saying it provides for the restructuring of the Anglo debt to make it more affordable.

“We are moving from a situation where a very significant strain is put upon us by these annual payments of in excess of €3bn to rescheduling that,” Mr Howlin told RTÉ.

“What we did yesterday was the first step, but the bigger gain is the negotiations that are ongoing in relation to the residual €27bn. It’s a more sustainable path to paying that to ensure that demonstrably Ireland is on a path to recovery.”

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