Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

I acknowledge the hard work done by Deputy Ciarán Lynch and the committee during the past year. They did as good a job as could be done in an imperfect situation without the tools or the time needed to do the job they might have liked to do.

The most important line in the banking inquiry's report is: "The withdrawal of [emergency liquidity assistance] was used as an explicit threat to prevent the Government from imposing losses on senior bondholders in March 2011." This is the finding of the cross-party banking inquiry team. There was an "explicit threat" in March 2011 from Jean-Claude Trichet to the Minister for Finance, Deputy Michael Noonan. In his testimony, the Minister, Deputy Noonan, stated that Mr. Trichet said, "if you do that [burn the senior bond holders], a bomb will go off and it won't be here, it'll be in Dublin." The Minister told the inquiry that he had told Mr. Trichet that as part of the programme he intended to burn bondholders and that Mr. Trichet had not agreed. The Minister said:

He didn't agree and he asked me was I aware that this would be treated by the markets as a default, which was reasonably strong pressure ... . [ELA] was underpinning Anglo to the tune of €41 billion at that time. ELA can't be given to a bank that defaults.

Deputy Ciarán Lynch and the team, correctly, based on this and other testimony, concluded that the withdrawal of ELA was used as an explicit threat.

In November 2011, several months after this explicit threat had been made directly to the Minister, I asked the Minister in this House whether any threat had been made to withdraw emergency liquidity assistance if Ireland sought to burn the bondholders. The Minister said that "neither of these threats was ever made". This is unambiguously misleading the Dáil on a matter of national importance. The Government was elected with a clear mandate to burn the bondholders. It appears it tried to do so, was threatened and made a certain decision. If the Minister for Finance feels he can walk into the House and deny those threats were ever made, we have a serious question.

In any other country I have lived in, what the Minister, Deputy Noonan, did in misleading the House on a matter of national importance would be an immediate resigning issue. Unambiguously, a Minister would resign for being found to have misled the House on such a serious matter. I have no doubt that this will be brushed off by Fine Gael as semantics or whatever. We do not have political accountability, which is a great irony given that the banking inquiry was trying to show a lack of accountability of the Regulator, the Department of Finance and politics. The Social Democrats and I believe the Minister, Deputy Noonan, should resign.

Now that we know the threat was made, we also believe an independent legal review should be immediately established. This review would determine whether a case could be taken against the European Central Bank, ECB, either to sue for damages and see if we can recoup all of the €25 billion still outstanding in Anglo promissory notes, or, at the very least, to seek a legal position from the European Court of Justice that states that, in threatening Ireland in the outrageous way it did, the ECB clearly overstepped its legal remit. We should use that ruling to go back to Europe and say we want burden sharing and that the €25 billion that is outstanding should be deemed odious debt and written off by the ECB.

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