Tag Archives: ECB

trichetJean Claude Trichet

… It is the position of the [ECB] Governing Council that it is only if we receive in writing a commitment from the Irish government vis-a-vis the Eurosystem on the four following points that we can authorise further provisions of ELA [emergency liquidity] to Irish financial institutions:

1) The Irish government shall send a request for financial support to the Eurogroup;

2) The request shall include the commitment to undertake decisive actions in the areas of fiscal consolidation, structural reforms and financial sector restructuring, in agreement with the European Commission, the International Monetary Fund and the ECB;

3) The plan for the restructuring of the Irish financial sector shall include the provision of the necessary capital to those Irish banks needing it and will be funded by the financial resources provided at the European and international level to the Irish government as well as by financial means currently available to the lrish government, including existing cash reserves of the Irish government;

4) The repayment of the funds provided in the form of ELA shall be fully guaranteed by the Irish government, which would ensure the payment of immediate compensation to the Central Bank of Ireland in the event of missed payments on the side of the recipient institutions.

I am sure that you are aware that a swift response is needed before markets open next week, as evidenced by recent market tensions which may further escalate, possibly in a disruptive way, if no concrete action is taken by the Irish government on the points I mention above.

Portion of a letter sent to then Finance Minister Brian Lenihan from ECB President Jean Claude Trichet on November 19, 2010

Jean Claude Trichet letter to Brian Lenihan (Irish Times)

Reuters

Meanwhile…

And…

Screen Shot 2014-11-06 at 09.03.27Screen Shot 2014-11-06 at 09.06.39

Via NAMAwinelake

You may recall Finance Minister Michael Noonan (above) joking about the legality of last week’s promissory note deal.

Well, it seems there are some people, who aren’t laughing – namely the Bundesbank’s president Jens Weidmann (top) who feels the deal is dangerously close to illegal monetary financing.

This morning’s Irish Times reports:

“The Bundesbank is unhappy with what it sees as indiscreet statements by Irish politicians on the role played by various officials in reaching the agreement.
There is annoyance, too, that remarks in Ireland on the resulting cost savings only highlighted the legal questions surrounding the arrangement.
For his part, Mr Weidmann said that Irish remarks had “underscored the fiscal elements in this transaction”.
Article 123 of the EU treaty forbids the ECB from engaging in monetary financing. However many officials close to the deal have conceded that both the original promissory note deal and its successor arrangement did just that – or at least came very close.
Yesterday, Mr Weidmann reiterated his “strict” definition of monetary financing and urged EU leaders to “accept the limitations of article 123 for our actions”.
Mr Weidmann said he was not “passing a legal judgment on a particular transaction”, but said the liquidation of IBRC had “repercussions” which the ECB would have to ensure conformed to its rules.”

 

Oh.

Bundesbank Concern At Irish Deal (Derek Scally, Irish Times)

Previously: There’s A Touch Of That About It

(Sasko Lazarov/Photocall Ireland)

Michael Noonan on Pat Kenny’s radio show on Friday to talk about that deal.

And the legality of the promissory notes.

Pat Kenny: “So what changed? Why did the ECB then change it’s mind about the whole principle of this which, I think, was described as, Philip Boucher Hayes reported from Frankfurt, or he was talking to people in Frankfurt. They described it as barely legal.”

Michael Noonan: “Well I don’t think that’s right you see. The legal people would say that the existing promissory note arrangement was totally contrary to…”

Kenny: “Illegal?”

Noonan: “Totally, you know.”

[Kenny laughs]

Noonan: “So any, I mean my argument all the time was…”

Kenny: “So it’s an improvement in its legality?”

Noonan: “Yeah. I mean people, some of the bank people were saying to me was ‘look what you’re saying is illegal’. I said, or I used to say to them, well it’s an awful lot more legal than what you agreed three years ago.”
Noonan laughs.

Kenny: “Last night [unintelligible] on RTÉ Radio said, from America, she was talking, she said it’s amazing how many things in the EU, or the Eurozone that are illegal until someone does them and then they become OK.”

Noonan: “Yeah, there’s a touch of that about it.”

Hmm.

Thanks Soundmigration and Sam Browne

 

Excellent.

ECB president Mario Draghi’s happy face’

Irish taxpayers will spend the next 40 years paying for losses rung up by a failed private bank

Ireland’s immediate burden has been eased by Thursday’s deal, but Irish taxpayers will still spend decades paying the price demanded by the ECB at the height of the panic in 2008.

…it’s no secret that the ECB has played a key role in this Irish drama. Lenihan maintained near the end of his life that he had put the bank guarantee in place at the insistence of the ECB, although the ECB has never acknowledged that publicly.

Ireland’s Bondage (Editorial, Wall Street Journal)

Xinhua/ZUMAPRESS

 


Michael Noonan and Brendan Howlin following  the announcement that a deal has been reached with the European Central Bank (ECB) in relation to the promissory notes used to bail out the former Anglo Irish Bank.

2038.

 What Happened? (NamasWinelake)

Ireland’s Kenny Declares Victory as Bank Debt Accord Reached (Bloomberg)

 

(Sasko Lazarov/Photocall Ireland)