It is infuriating that secret communications in 2010 on the eve of Ireland’s bailout from the IMF, ECB and EU which were closely guarded back then and whose disclosure in response to Freedom of Information requests has been strongly resisted, are now dropped into conversations as if they were everyday and mundane. We learned during the week that the IMF mission chief to Ireland in 2010, Ashoka Mody outlined three options for Ireland in 2010 – burning bondholders, extending our debt or getting lower interest rates or austerity and the last Government plumped for austerity.
Today, on RTE Radio’s This Week programme, Fianna Fail’s TD Billy Kelleher (pictured above) who was a junior minister for trade and commerce between 2009 and when FF lost the February 2011 election, blithely commented that back in 2010 the ECB threatened Ireland that if we didn’t enter a bailout programme, then the ECB would withdraw €100bn of lending to our banks. The podcast of the programme should be available in a couple of hours, but there is little to add, and the former junior minister wasn’t challenged about the remarks by the presenter or by the Fine Gael deputy, Paschal Donohoe.
What the former minister stated in a matter-of-fact manner has always been suspected, but the best we could get from current finance minister Michael Noonan was that “a nod is as good as a wink to a blind horse” but even Minister Noonan has been careful to say Ireland was never threatened – “No, no there’s no threat and they never threaten” is what Minister Noonan said in June 2011. Even the plain-speaking and preemptive governor of the Central Bank of Ireland, Patrick Honohan would only refer to the “influence” of the ECB – no suggestion of any threat from Governor Honohan either. Even the Dan O’Brien “the Bailout Boys go to Dublin”, the 28-minute radio programme for BBC Radio 4 available here from Youtube, doesn’t capture the explicit threat by the ECB and indeed the ECB representative to Ireland’s bailout Klaus Masuch, whom Vincent Browne monstered at that Troika news conference last year, asserts it was Ireland that made the bailout choice and there was no pressure from the ECB.
Now we have a minister telling us the ECB threatened to withdraw funding to our banks if we didn’t enter a bailout, which has subsequently seen 10s of billions shoveled into banks and paid to bondholders. Because Deputy Kelleher wasn’t pressed, we don’t know the nature of the threat and how it was treated.