DESPITE SECURING INTEREST rate cuts that will save Ireland €10 billion on its EU and IMF loans, the Government has been criticsed for performing a U-turn on its pre-election promise to burn senior bondholders at Anglo Irish Bank.

Fianna Fáil spokesperson Michael McGrath said that both Labour and Fine Gael misled the Irish people with a series of promises about imposing losses on senior bondholders at nationalised financial institutions.

About €700m is to be repaid to Anglo bondholders in the first week of November.

McGrath was responding to comments by finance minister Michael Noonan yesterday that the question of burning senior bondholders is no longer a primary concern.

Noonan made the comments ahead of a meeting with European Central Bank president Jean-Claude Trichet today. Arthur Beesley in the Irish Times reports that Noonan said the Anglo issued will be raised but the Minister is not hopeful that the ECB will allow any losses to be imposed on senior debt.

Instead, Noonan will focus on expensive promissory notes and look for changes to the terms of Ireland’s bailout loans, reports the Irish Examiner this morning.

Savings

At a meeting in Wroclaw, Poland yesterday, the eurozone’s finance ministers signed off on an agreement, which Noonan says will save Ireland up to €10 billion over the life of the EU and IMF loans.

According to Bloomberg, Noonan expects savings of between €800m and €900m next year.

Meanwhile, British Chancellor George Osborne has warned that the eurozone is running out of time to fix its debt problems.

According to Reuters, Osborne said, “People know that time is running out, that the euro zone needs to show it can get a grip on the situation.”

However, he said the difficult situation is not confined to Europe.

“I think Tim Geithner himself when he was here yesterday was very clear America needs to show it can deal with its debts and the world, through the G20, through the IMF, needs to show it can deal with the big imbalances in the world.”