Promissory notes as the price of ‘yes’ to Treaty change?
This post was written by Stephen Kinsella
Morning Ireland this morning carried an interesting exchange with Minister Rabbitte and his interviewer Cathal Mac Coille. At about 8 minutes in, talking about the EU-wide debt situation and Enda Kenny’s meeting with Dr Merkel, the Minister says the following:
Rabbitte: …. The Minister for Finance has hinted at areas where we are trying to alleviate the burden of debt that is on Ireland as a result of the legacy and the circumstances we’ve inherited from the last government and within the terms of the Memorandum of Understanding. I think he has set that out for example in maybe not explicit terms but significantly explicit terms in respect of the promissory notes arrangement entered into by the previous government where in excess of 30 billion debt—private debt—is expectedto be born by the government here. In the general arrangement, you know, it is a circumstance that this burden was placed on Ireland in order not to infect the banking system of the Eurozone. Now that is a very unfair burden and given the way we have complied with the strictures on us we are looking for alleviation on that.
The interview continues:
Cathal MacCoille: What about Treaty change? What is our position? It seems to be getting closer and closer, and the Germans are talking harder and harder about it.
Rabbitte: …no Irish political party wants a referendum, but I don’t think we shouldn’t dismiss sight unseen. I’ve great confidence in the common sense of a majority the Irish people. If there was a pathway out the morass we find ourselves in now, and if there was a significant alleviation in terms of the debt burden promised as a result of whatever Treaty changes might be contemplated then we would have to look at that situation very seriously. We’re not looking for a referendum we don’t want a referendum but I’m not prepared to dismiss the idea of a referendum out of hand without knowing the context and without knowing what it would offer the Irish people.
Cathal MacCoille: It sounds like the money terms would need to be right.
Rabbitte: Debt sustainability is still an issue, but yes.
Is this the new talking point? Is it that case that Ireland’s promissory notes are the price of a ‘yes’ from the government to a possible Treaty change? If so: what should the ‘discount’ be? Karl (and indeed Lorcan) have been spending quite a bit of time on the promissory note story, and given the sums of money involved, it’s something we should keep an eye on.