Fine Gael election manifesto
Make the bond-holders share the burden of the debts of insolvent financial institutions. This can be done unilaterally for most junior bond-holders but should be extended – ideally as part of a European-wide framework – for senior debt for insolvent institutions like Anglo-Irish and Irish Nationwide that no longer have any systemic economic importance.
16 February. The EU Commissioner for Economic and Monetary Affairs, Olli Rehn, said: “There is simply no appetite for considering senior bond-holders in this context, because we want to avoid any kind of potential contagion effect, and therefore this issue is not at the table, and that was made very clear yesterday in the meeting of the Eurogroup.”
1 April. Enda Kenny said: “There appears [to be] little appetite in Europe to go beyond the €5 billion worth of subordinated debt that is being written down,” words echoed by the Minister for Finance, Michael Noonan, in an RTE interview later that day.
So guess who’s pulling Fine Gael’s strings!
Labour Party election manifesto
Labour believes that bank bond-holders should share in bank losses. Depositors must be fully protected. Labour will seek to ensure that burden sharing with bond-holders is part of a re-negotiated deal.
2 April. The Labour Party’s former finance spokes-person and now Minister for Social Protection, Joan Burton, said Ireland should be facilitated by the EU in return for not touching senior bond-holders. She told the Irish Times: “We should now get a quid pro quo in respect of two items. The first is a reduction in the interest rate and the second is a renegotiated long-term debt package.”
Well, aren’t we really good pupils!People’s News: News digest of the People’s Movement, No.47, 16 April 2011