ECB PRESIDENT Mario Draghi has given the clearest public indication yet that the European Central Bank is unwilling to allow a renegotiation of the Anglo Irish Bank promissory notes.
Addressing MEPs at a committee meeting in Brussels, Draghi firmly rebuffed appeals that the ECB allow a renegotiation of the Anglo notes, as part of a programme which would loosen cash restrictions within the Irish government.
Asked specifically if the ECB “plans to do anything about the existing terms of the contract”, Draghi flatly responded: “The answer is no.
“The existing terms of a contract are the terms of a contract. We have undertaken certain steps. We will continue to reflect on this issue with a forthcoming attitude, but at the present time we have these terms of a contract,” he said.
Draghi also said he was keen that the Fiscal Compact currently set for ratification around Europe would be furnished with a “growth compact” where EU member states agreed common measures to inflate their economies.
“We have to go back and make it a compact,” Draghi said. “That’s very, very important.”
The Italian was speaking in response to questioning from Fine Gael’s Gay Mitchell, who had appealed to Draghi to take measures which allowed Ireland to overcome what he saw were its twin problems of “cash flow and confidence”.
“Do you really expect in all of those circumstances, that we can really expect to meet the committments of the promissory notes?” Mitchell asked.
“Isn’t it time that they were recast? That we were given some opportunity to deal with it over a longer period, so that that cash flow issue, as well as the confidence issue, can be addressed and we can return to growth?”
Mitchell also asked Draghi to “internalise” a suggestion that European bodies needed to “stop the language of austerity”, explaining:
I was director of elections for four pro-European referenda in Ireland, I’m a member of the European Parliament, I ran for high office last year – all I can tell you is that it was a great liability.The EU has taken on the mantle of the IMF – the way they used to be seen as having no empathy.
We’re slightly more popular than the measles, Mr President, and we really need to realise that.
Draghi commented that Ireland had displayed a “strong commitment to implement the programme policies”, and that the government’s tasks now were to continue restructuring the financial sector and strengthening the balance sheets of the banks.
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