Kenny rejects €1.25bn Anglo default

THE TAOISEACH has warned Ireland’s international reputation would be damaged if it defaulted on the €1.25 billion owed to unsecured bondholders.

“Despite the economic circumstances in which we find ourselves, the reputation and status of this country has increased with regard to the confidence of investors abroad, the perception of this country abroad and commentary from international financial analysts, business people and politicians,” Enda Kenny said yesterday.

Opposing the payment, Sinn Féin leader Gerry Adams said it was not Ireland’s debt.

“We raised the issue with representatives from the troika last week and the IMF representative stated publicly that it is not opposed to imposing losses on bondholders,” Mr Adams added.

Mr Kenny said he wanted Mr Adams to understand that it was not to his liking to stand up in the Dáil and say there was no alternative but to pay what a solemn Irish government committed itself to, with the consequent impact on reputation and status.

“The deputy seems to have a very different view of the kind of catastrophic consequences if a default occurs,” he added.

“I have pointed out what has happened in Greece, and I am quite sure that even with his warped version of the development of the EU, which his party opposed at every turn in the road, he does not want to see that happen to the citizens of this country.”

Later, the technical group moved a Private Members’ motion calling on the Government not to pay the €1.25 billion.

The bondholders, the motion said, were “anonymous speculators, many of whom bought Anglo Irish Bank bonds at between 50 per cent and 80 per cent discount and who stand to make huge profits if they are paid full face value”.

Clare Daly (Socialist Party) said the money was being paid against a backdrop of studies revealing that half of families in the State were struggling to meet ordinary household bills.

Independent TD Thomas Pringle said there should be transparent and open negotiated burden-sharing of bank debt.

Minister of State for Finance Brian Hayes said real progress was being made in returning the country to growth.

“At this stage, I think it is fair to say there is a growing consensus that the recapitalisation decision, established by the Government in March 2011, is succeeding.”