Mr. Patrick Honohan, Governor at the Central Bank has rallied in behind political moves to get a bankdeabt deal from Europe. This is the first time that Mr. Honohan has made such a statement.
“The planned repayment of the European Central Bank’s aid comes at the wrong time. The government is trying to win back trust on the debt market, and current repayment plan is complicating this,” Mr Honohan was reported as saying in the Frankfurter Allgemeine Zeitung in an interview published on Saturday.
“Of course the money will be paid, but it should happen over a longer time frame. That would make much more sense given the wider aid programme for Ireland. We need more time,” he continued.
The Irish Times reported: Mr Honohan’s comments were made before Communications Minister Pat Rabbitte told RTE that the Government would not pay the next €3.1bn instalment linked to the nationalisation ofAnglo Irish Bank.
Mr Rabbitte’s comment was the first time a serving minister threatened to refuse payment but it was quickly dismissed by some analysts.
Owen Callan, a Dublin-based economist with Danske Bank, said in a note that “we would suggest not reading too much” into Mr Rabbitte’s comments.
“The government is under pressure from the electorate to show they are fighting for the best deal for Ireland in terms of relief on the cost of rescuing its failed banking system,” Mr Callan said.