Professor Philip Lane:

The fundamental issue is that any central bank, including the European Central Bank or the Central Bank of Ireland, commit to any lending provided in the middle of an emergency such as the promissory notes being temporary in nature and, when the recovery sets in, the loans being unwound. My reading of the case of Ballyhea Says No is that it disputes this and states the circumstances are so specific and special in this scenario that an exception should be made to the Central Bank's philosophy that the loans need to be unwound. That is fundamentally it. I can understand the point of view, but it runs against the foundations of how the Central Bank works and especially the 19-country monetary union. Imagine a situation where other countries stated they had specific problems and specific reasons they also needed special central bank funding. One of the foundations of the euro is there not be monetary financing of governments and that when there are emergency loans, like those made to Anglo Irish Bank, with the promissory notes as collateral, eventually they are reversed. What is happening is that the loans are reversing but not at a very quick pace. It is a very gradual reversal process.