OPPOSITION PARTIES ARE starting to pile pressure on the Government over this week’s €718 million payout to Anglo Irish Bank bondholders.
Fianna Fáil and Sinn Féin have spoken out against paying the US$1 billion bond that falls due for repayment on Wednesday.
Fianna Fáil’s spokesman Michael McGrath has called on the Taoiseach to contact the incoming president of the European Central Bank, Mario Draghi, to make a last ditch effort to stop the repayment.
“There is a fundamental issue of equity in the European Union at stake here,” said McGrath. “Greece has been granted a haircut of 50 per cent of its sovereign debt held by European banks while the ECB is attempting to force Ireland to repay in full unsecured, unguaranteed bonds owed by failed Irish banks currently being wound up.
“Many reputable economists believe the bond should not be redeemed at all,” he continued.
Applying a 50 per cent discount on the bond would save Ireland over €350 million. The Government’s efforts in recent days to claim that Anglo would be repaying the €715m bond out of its own resources were nothing short of insulting to the intelligence of the Irish people,” added McGrath.
Enda Kenny had previously said that the repayment will come from the nationalised bank’s own resources and not the taxpayer.
Anglo Irish Bank, or the Irish Bank Resolution Corporation (IBRC) as it is now called, will be making arrangements for the repayment of the bond tomorrow. It is understood the Government will also sign off on the payment on Tuesday.
Last week, Sinn Féin leader Gerry Adams said the Government had missed an opportunity to put the Irish banking debt on the agenda while EU leaders were discussing haircuts on Greek debts.
The party has claimed that there is no political, legal or moral obligation on the Government to pay the US$1 billion bond due this week.
Speaking on RTÉ’s Drivetime, McGrath echoed these sentiments, stating there had been no robust negotiation by the Government on the issue.
The bond is being repaid to senior, unsecured Anglo bondholders but the bank and the Government insist that promissory note arrangements mean the obligations must be met in full.
It is not clear who exactly are the beneficiaries of this week’s payments are. The bond was first issued in 2006 but could have been sold on by its original holders.
IBRC has another €1.25 billion payment falling due on 25 January, 2012.
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