Michael Noonan (Limerick City, Fine Gael)

Deputy Donnelly asked about the connection between the programme in which we are involved and the repayment of senior debt. The bit that is on the record is what the late Brian Lenihan said in this House before Christmas last year when he said it was made absolutely clear to him by the European Central Bank that if there was any talk of burden sharing with senior bondholders, there would be no programme. That is the connection between the two.

With regard to threats, the ECB does not operate that way. Jean-Claude Trichet is a perfect gentleman and I have had several conversations with him and with others in the ECB. It is also true, however, that when I start discussing in the same conversation the possibility of burden sharing with senior bondholders, I am always reminded of all the ECB has done for Ireland and how it kept the Irish banking system going with liquidity. Even now, when we have reduced the amount dramatically through deleveraging and accessing funds on the wholesale market, it is still €110 billion. It never threatened to raise the interest rate either, but it is also mentioned in conversation that not only is the ECB giving Ireland all this money, it is giving it at very favourable interest rates, and it will continue to do so.

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