TAOISEACH ENDA Kenny has said the €100 billion rescue package for Spain’s banking sector will bring “stability to the euro and the euro zone”, but Fianna Fáil’s Timmy Dooley has said it is “a significant setback” for the Government.
Speaking to reporters after the opening of new offices for Coillte Teoranta in Castlebar, Co Mayo, Mr Kenny rejected claims by the Opposition that Spain got a better deal than Ireland in terms of its bank rescue.
He said the deal for Spain was slightly different from that of Ireland in that Ireland received a package that dealt both with bank recapitalisation and the running of the State.
In Spain’s case it was recapitalisation money for its banks. Spain would have to pay the same interest rate as Ireland in that regard and would have to underwrite that. “Spain have to deal with their [deficit] reduction to 3 per cent by next year. Ireland has a further year in which to do that,” the Taoiseach added.
Asked if Spain might have to look for further bailout money in the future, Mr Kenny said enormous sums were involved in an enormous country with a huge economy. For now, he continued, the fact that monies were being made available to deal with the banking issue in Spain brought about “a sense of security and stability that is to be welcomed”.
But the Taoiseach stressed that Spain would have to continue to meet the interest rate and the other requirements of the loan.
Speaking on RTÉ Radio 1’s Today with Pat Kenny earlier yesterday, Mr Dooley said: “I would have thought the size of the Spanish economy was such that they probably would have had a stronger hand of cards at the negotiating table; that doesn’t appear to have been successful.”
He said it was a significant setback from the Government’s perspective. “It clearly indicates that whatever effort the Irish Government have been making has fallen on deaf ears.
“I suppose it would have been helpful if the Government had set out, over the last number of months, what position they were taking, what it was they were trying to negotiate, what deal they were trying to achieve for Ireland, particularly in relation to the promissory notes.”
Minister for Transport, Tourism and Sport Leo Varadkar told the Lunchtime programme on Newstalk: “The debts of the Spanish banks now go on to the Spanish sovereign and it adds to their national debt, which is exactly what happened here and we were hoping that that wouldn’t happen in Spain.”
However, he said, it was important to bear in mind that Spain’s bailout was “different” from Ireland’s. “One hundred per cent of their bailout is for their banks. Most of our bailout – and you wouldn’t think this, listening to what passes for commentary in Ireland – most of our bailout was not for the banks: about €15 billion or €17 billion went to the banks; about €40 billion is gone into public spending, into pensions, social welfare, and so on.”
Mr Varadkar added: “The ideal outcome for us of course would be the federalisation of the debt and the debt would be pooled across Europe, but there’s consequences of that too and that won’t come without concessions on our part.”
