Irish Prime Minister Enda Kenny has claimed victory in his battle to persuade Europe to change the terms of the bank bail-out.
The Fine Gael leader flies on a state visit to Paris on Monday on the back of a phone agreement with German chancellor Angela Merkel.
The Irish Times reports that Kenny and Merkel agreed that the ‘unique circumstances’ of Ireland’s economic crisis require a special approach.
The two leaders spoke for almost 30 minutes to discuss the fall-out of the German leader’s remarks on Friday ruling out relief for ‘legacy’ bank debt.
The conversation was called for by both governments to clear up the issue.
An Irish government spokesman told the Irish Times: “They discussed the unique circumstances behind Ireland’s banking and sovereign debt crisis, and Ireland’s plans for a full return to the markets.
“The talks reiterated a June eurozone commitment to look again at the situation of the Irish financial sector with a view to further improving the sustainability of the well-performing adjustment programme.
“They recognise in this context that Ireland is a special case and that the euro group will take that into account.”
The paper says the statement gives Kenny a welcome boost ahead of his first official visit to the French capital.
French leaders have backed Dublin’s stance that some old, so-called ‘legacy’ debt would have to be borne by the European Stability Mechanism (ESM) to make good on a pledge by European leaders in June to break the link between sovereign and bank debt.
A French source told the Irish Times: “The statement of June opened the door to this – and it hasn’t been closed.”
Another source said: “It is very clear that including old debt was in the spirit of the June deal.”
The Germans had issued a statement in the wake of Merkel’s remarks in which they reiterated that talks on recapitalising European banks are ongoing.
The German statement read: “The later process of recapitalisation of the banks will be a complex one with negotiations at each stage to address important issues.
“Ireland and Germany will continue to co-operate closely in order to improve the sustainability of the Irish programme and ensure its successful outcome.”
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Switch to the desktop site to post a comment.IrelandNorth | Oct 24, 2012, 07:21 AM EDT
Don't pretend to understand Angela's game plan. One minute she's playing harball, then switches to soptball. Still, top [Deutsch]marks to Enda for playing his hand well. Have criticised him in the past, so happy to moderate my previous citicisms. Never underestimate a small island nation.
DanOLoingsigh | Oct 23, 2012, 08:41 PM EDT
Curtis...most financial 'experts' say Greece will be the firsI to exit the Euro straitjacket...
curtisjohnson | Oct 22, 2012, 10:21 PM EDT
As I predicted, more evidence that Merkel was bluffing - Germany's banks are leveraged into and part of the European ponzi scheme - they cannot afford a default or exit of one of the PIIGS.
Searlit | Oct 22, 2012, 07:04 PM EDT
It is a bit of drama, but what else have we got to expect? I think there will be an agreement on the recapitalisation of the banks fairly soon. I hope.
bunkerhill | Oct 22, 2012, 03:35 PM EDT
I think this is wonderful news for Ireland. Also starting in January the Irish diaspora will be returning to Ireland in record numbers which should boost the Irish economy substantially. The young Irish like Patrick and John Collison, the young twelve year old Casey from Dublin, along with the two young Irish winners of a European contest are opening eyes around the world to the engineering ability of the native Irish. In fact it was an Irishman Liam O'Murchu who recognized the devastating virus that was circling the globe knocking out Iranian centrifuges for a start and then continuing on to other countries. Liam appeared on Sixty Minutes, but most Americans would not recognize him as Irish from his name. The Irish school system has built on that inherent ability. The Irish have been teachers from the dark ages and in fact built fantastic schools all across the US. I believe Merkel values Irish integrity along with their inherent skill as do many other countries around the world. I think Merkel also recognizes that the Irish, like the Germans, are very hard workers. Here's hoping that the tiny, ancient country of Ireland will soon return to the prosperity they so truly deserve.
greensod | Oct 22, 2012, 02:24 PM EDT
hollabackgurl:I totally agree:
hollabackgurl | Oct 22, 2012, 09:42 AM EDT
Mein arsen! The headline should read, Angela Merkel does not give a flying monkeys about a small island on the edge of Europe. That would put Kenny's 'achievement' in context.
Portia777 | Oct 22, 2012, 09:20 AM EDT
Dont you just love the drama here and how both play their roles so well to the sheeple.