Nothing to see here, as Irish minister’s comments on Anglo promissory note are amplified

There was a frisson of hope and defiance yesterday afternoon when RTE produced the report below on its website.

Was the Government or at least the Labour Party component, without which the Coalition will fall, changing tack in its dealings with the ECB, would unilateral action be on the table after all unless there was some movement on the part of the ECB, has the Government received tacit approval for a plan which it was sure it could deliver?

Sadly for those who waited up until 11pm last night to see The Week In Politics and the full interview and its context – available on RTE’s player here from 24:40 –  it seems that nothing has changed. The Labour Minister for Communications Energy and Natural Resources, Pat Rabbitte said that the €3.1bn payment that fell due in 2012 had not been paid. And he indeed did say that the payment would not be made in March 2013 either.

But as we all know, when the smoke cleared last March, what Minister Noonan had actually done was instead of paying €3.1bn in hard cash to Anglo or IBRC, he issued a sovereign bond paying 6% per annum, and used the cash proceeds from that bond to pay Anglo. If that is what the Government means by saying “not paid” then who are they trying to fool?

What Minister Rabbitte did say was that if the Anglo note could be dealt with in 2013, then our deficit as a proportion of GDP would fall to just over 6% compared to a 7.5% target, and that implies something more positive is afoot, but after 15 months since Minister Noonan started discussing the promissory notes with then-ECB president Jean-Claude Trichet in Poznan, there has been  no practical change to the notes and the commitment by this State to pay €47bn for IBRC’s debt, comprising €31bn in promissory notes and €16bn in interest.

So, nothing to see here, the Labour party hasn’t adopted a defiant position, there is nothing tangible to report and if anything, this has been a distraction from the post-Budget 2013 debate. Then again Pat Rabbitte is one of the finest political operators and the Anglo diversion might be a deliberate if ultimately empty ploy to move the discussion away from a budget which has the potential to decimate support for the Labour party.

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