17th Mar 2018

ECB gives blessing to 'historic' debt deal for Ireland

The Irish government has secured the tacit blessing of the European Central Bank (ECB) on a long-awaited deal extending the debt repayment on its bailed out banks.

"Today's outcome is an historic step on the road to economic recovery," Irish Prime Minister Enda Kenny said on Thursday (7 February) in the Irish parliament.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Kenny: the Anglo Irish Bank collapsed in 2010, forcing Ireland into an EU-IMF bailout (Photo:

"The new plan will likely materially improve perceptions of our debt sustainability in the eyes of potential investors in Ireland," Kenny added.

Meanwhile, in Frankfurt, the wording was everything but spectacular.

"We took note of the actions of the Irish government," ECB chief Mario Draghi said in a press conference following the monthly meeting of the bank's governing council.

Yet the statement was everything Ireland wanted to hear. It also stood in stark contrast with what Draghi had said in a similar press conference in December: that the ECB is forbidden to engage in "monetary financing" in any deal on extending the maturity of the so-called promissory notes which Ireland had to pay to the ECB every year as part of its bailout deal.

The Irish government has for a long time argued that the deal it agreed to in consultation with the ECB back in 2010, when trying to save the Anglo Irish Bank from going bust, was weighing too much on its overall efforts to cut back the public deficit and return to financial markets.

Back then, it issued so-called promissory notes stating that the government will pay back about €47 billion over the next 10 years - the estimated cost of bailing out Anglo Irish Bank and Irish Nationwide, including interest payments.

On Wednesday, the Irish parliament passed an emergency bill liquidating the Anglo Irish Bank's successor.

Draghi rejected the idea that this was a "choreography" agreed between Dublin and Frankfurt. The central banker commended the Irish government for its "progress on the financial policy front."

"That is what really mattered to re-establish the reputation of Ireland on financial markets," Draghi added.

Under the deal, the Anglo Irish promissory notes will be transformed into long term government bonds held by the Irish central bank. Initially, the Irish government sought to keep the bonds until maturity - between 2038 and 2053 - but the ECB opposed this idea, as it would have amounted to direct government funding. Instead, Dublin agreed to pay interests on the bonds which can be traded.

The deal will allow Dublin to return to markets this year and exit the EU-International-Monetary-Fund bailout programme.

EU economics commissioner Olli Rehn on Thursday also welcomed the "major steps taken by Irish authorities regarding the promissory notes [that] should further boost confidence and help to facilitate a successful outcome."

Dublin nationalises Anglo Irish Bank

The Irish government announced Thursday night its intention to nationalise Anglo Irish Bank in the face of large deposit withdrawals in recent days.

Ireland and Portugal set for debt deferral

Ireland and Portugal are to be given more time to repay their emergency loans with both countries seen as good pupils in following the imposed austerity programme.


Lessons from Ireland's failed bank guarantee

Five years after the failed Irish experiment of giving a blanket state guarantee for banks, the EU has more rules in place, but taxpayers' money is still on the line.

Merkel in Paris for eurozone reform talks

Angela Merkel - who started her fourth term as Germany's chancellor earlier this week - is wasting no time on big issues like eurozone reforms. On Friday she is meeting Emmanuel Macron where the two will seek common ground.

VW dismisses complaints on Dieselgate fix

'I think customers who want to get information (...) are able to receive information if they want," VW management board member Hiltrud Werner told EUobserver. Consumer groups disagree.

News in Brief

  1. Sweden emerges as possible US-North Korean summit host
  2. Google accused of paying academics backing its policies
  3. New interior minister: 'Islam doesn't belong to Germany'
  4. Hamburg 'dieselgate' driver wins case to get new VW car
  5. Slovak deputy PM asked to form new government
  6. US, Germany, France condemn 'assault on UK sovereignty'
  7. MEPs accept Amsterdam as seat for EU medicines agency
  8. Auditors: EU farm 'simplification' made subsidies more complex

Stakeholders' Highlights

  1. Counter BalanceConmtroversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  2. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  3. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  4. Martens CentreEuropean Defence Union: Time to Aim High?
  5. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  6. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  7. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  8. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  9. EPSUWill the Circular Economy be an Economy With no Workers?
  10. European Jewish CongressThe 2018 European Medal of Tolerance Goes to Prince Albert II of Monaco
  11. FiscalNoteGlobal Policy Trends: What to Watch in 2018
  12. Human Rights and Democracy NetworkPromoting Human Rights and Democracy in the Next Eu Multiannual Financial Framework

Latest News

  1. Brexit and trade will top This WEEK
  2. Dutch MPs in plan to shut EU website on Russian propaganda
  3. Four years on – but we will not forget illegally-occupied Crimea
  4. Evacuated women from Libya arrive newly-pregnant
  5. Merkel in Paris for eurozone reform talks
  6. Commission rejects ombudsman criticism over Barroso case
  7. Western allies back UK amid Russian media blitz
  8. Meet the European Parliament's twittersphere