THE GOVERNOR of the Central Bank of Ireland is set to meet his eurozone counterparts today and explain Ireland’s case for a restructuring of Anglo Irish Bank’s promissory notes.
Patrick Honohan will state Ireland’s case at the monthly meeting of the European Central Bank’s governing council in Frankfurt, which will be chaired by ECB president Mario Draghi and attend by the governors of the other eurozone institutions.
The promissory notes are themselves owed directly to the Central Bank of Ireland, but any operation to permanently create new currency – as the operation to issue the notes did – requires ECB approval.
Without that approval, the notes are due for repayment as other loans would be – meaning the Irish state, through the Irish Bank Resolution Corporation which has subsumed Anglo, is responsible for repaying the loans.
The first annual repayment of the promissory notes, of €3.1 billion, is due at the end of the month.
The government has been seeking to restructure the loans so that they can be repaid over a longer period, in order to minimise the burden to the taxpayer.
In this morning’s Irish Times, Simon Carswell suggests that other options which may be considered include a second note, or a government bond, being substituted for this month’s cash payment so that discussions on restructuring the debt can continue without an immediate cash payment being required.
Cabinet ministers have openly suggested that although it will not be seen as a quid pro quo, a deal would help the government secure a Yes vote on the fiscl compact referendum.
Today’s meeting will also discuss whether to adjust the ECB’s main interest rates, though market expectations are that the rates will remain unchanged.
To embed this post, copy the code below on your site
have your say