The Irish government has won its battle to alleviate the country’s debt burden on the taxpayer in a new deal with the European Union.
The deal was announced at 4am on Friday after a summit of Eurozone leaders in Brussels.
A statement issued by the EU after the meeting stated that the summit had pledged to "examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme."
The summit agreed that the EU’s permanent bailout mechanism could be used to directly recapitalize Eurozone banks, a key demand from the Irish and Spanish governments ahead of the crisis meeting.
The statement added that EU leaders also agreed to work towards a tighter economic and monetary union through more centralized budget oversight to protect their single currency from future crises.
Irish Prime Minister Enda Kenny hailed the deal as a major victory for the taxpayers of Ireland.
He also said it signaled a "seismic shift in EU policy."
According to Kenny, “This deal will allow Ireland to re-engineer its overall debt level, which would reduce the burden on Irish taxpayers.
“What was deemed to be unachievable has now become a reality and that principle has been established, decided and agreed upon by the council and heads of government.
“The new deal means Ireland’s overall debt burden, including the bank debt, can be re-engineered in a way that will give Ireland equal treatment to Spain and any other countries that avail of the new system.
“That means that head of governments' decision will now be referred to the Eurogroup of Eurozone finance ministers for an analysis of how best this might be used in Ireland’s case to re-engineer the debt burden — which is what we set out to do.
“In the case of countries that are going to be involved here, where funding is made available through the EFSF it will later be transferred to the ESM, and that is also the case in reference to Spain.
“The fundamental principle of the ESM providing funding to break the link between sovereign and bank debt has now been agreed by the heads of government.
“It allows in Ireland’s case the opportunity to re-engineer in a number of ways the debt burden on our taxpayers.”
The new deal also represents a major shift in German opinion after their government opposed the use of the European Stability Mechanism (ESM) to directly recapitalize banks.
Kenny’s deputy Prime Minister Eamon Gilmore described the deal as: “A major game-changer which will significantly improve Ireland’s prospects of avoiding a second bailout.”
Gilmore said: “The deal lifts the bank debt burden from Irish taxpayers and improves the chances of a return to the bond markets.”
He also said he believed the deal was retrospective and would be applied to the Irish recapitalization.
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Switch to the desktop site to post a comment.EamonnDublin | Jul 04, 2012, 12:48 PM EDT
Indeed it is Seán, 'tis a terrible thing altogether! Éamonn.
seanomelb | Jul 02, 2012, 11:41 PM EDT
Jesus Eamonn! the ultimate insult to have your post associated with bythebay.
Bythebay | Jul 02, 2012, 11:43 AM EDT
EphraimKibbey, you didn't answer my question because you don't have an answer because you don't know. You're focused on justifying the run amock US debt level and have no idea how it will be paid or by whom. Actually China owns much of your debt!!
Bythebay | Jul 02, 2012, 11:39 AM EDT
Message posted July 2, 2012 at 6:23 AM EDT is NOT mine, it's EamonnDublin.
Bythebay | Jul 02, 2012, 05:23 AM EDT
Seán - The rain in Spain falls mainly on the plain - but they still won Euro 2012! Hasta La Vista, Baby! If one of Barack's Bhoys reads this, they'll think it's in code. Sayonara (means "G'Day, Moyte!"), Éamonn.
seanomelb | Jul 01, 2012, 07:36 PM EDT
Eamonn it's 8degrees Celsius outside and raining cats and dogs. I hope no rain falls on the ocean, Briano may think it effects sea levels.Coldest winter in 10 years here in Melb should grab a plane to Q'ld.
EamonnDublin | Jul 01, 2012, 04:43 AM EDT
Way to go, Seán!! Thank you! Have a good BarBie - surf's up! Best Wishes, Éamonn.
EphraimKibbey | Jul 01, 2012, 12:19 AM EDT
@Bythebay - Currently the US is seen as the safest place to put one's money. People and governments around the world are giving America a loan rate soooo low that when calculated in constant dollars, they are PAYING the US to borrow their money. It is the best time to borrow the money to rebuild our country and get our economy humming again. Only the GOP is in the way of moving America forward - NO YOU CAN'T! Once the W. tax rates expire and the economy is back, we will start paying down the deficit like we were under Clinton. Remember the surplus Clinton left to Bush? Most of the debt has resulted from the decline in revenues because of the tax cuts and the crash both of which have GOP fingerprints all over them. The Stimulus is the only part on Obama's plate. Spending has STOPPED its steep climb under Obama compared to what it was doing under W..
seanomelb | Jun 30, 2012, 08:40 PM EDT
If you believe we are in agreement Eamonn I must have misread your post. I will read your posts more carefully in the future.
EamonnDublin | Jun 30, 2012, 01:57 PM EDT
Hi "Wounded Knee". Thanks for your kind comment. Now, go tell the people who are owed the money that this is not an Irish "debt". What sort of totally stupid "logic" is going on in that head of yours? And you say that MY posts are "little more than nonsense"! Actually, "little more than nonsense" is a step above your total nonsense. Could you please tell us exactly what you are driving at? If I owe money, I can tell my creditor that I don't owe the money until I'm blue in the face. The fact is that we, the people, are now stuck with the debt because our unbelievably useless government says we are going to pay it back. Éamonn, Dublin, Ireland.
WoundedKnee | Jun 30, 2012, 01:34 PM EDT
EamonnDublin: Most of your posts are little more than nonsense. In the case below, you appear to be unaware that the Irish "debt" is actually the debt of a small handful of gangster capitalists and bankers. It isn't Irish debt. Irish workers didn't borrow that money, those who were running Anglo and other corrupt banks borrowed it. The fact that a handful of corrupt and incompetent politicians such as Lenehan agreed that the Irish people should take over that debt is irrelevant. In a properly run country, fools like Lenehan and Cowan would have been arrested and tried for treason.
Bythebay | Jun 30, 2012, 10:53 AM EDT
What's happening with the US $15 trillion debt that will result in the US's default on July 1?? How will that be reengineered? Or is the US waiting for Europe to tell them what to do?
EamonnDublin | Jun 30, 2012, 01:19 AM EDT
Sean, I clearly stated that "Spain got themselves a better deal than Ireland, and now the Irish situation has to be re-visited, as everybody should be seen to be treated in the same manner". Now Seán, how in God's name does that statement lack common sense. It's even EXACTLY the same as you are saying yourself! Or is it that you simply ALWAYS have to try to pick an argument? Éamonn, Dublin, Ireland.
seanomelb | Jun 29, 2012, 07:09 PM EDT
Eamonn the new rules may have been spearheaded by Spain,France and Italy.The new rules have to be available to all nations. Your argument Eamonn lacks common sense.I noticed Cameron scurrying around in the back ground trying to get his to bobs worth in.He should mind his own business as Britain is not part of the Euro monetary zone.He was told in a nice way to push off.
Searlit | Jun 29, 2012, 06:57 PM EDT
You said it so well, EphraimKibbey.
KevinKehoe | Jun 29, 2012, 05:42 PM EDT
Agree with EamonnDublin. It was the Spanish who pushed for this deal, Kenny & Co had the back seats and made no input like always.
EphraimKibbey | Jun 29, 2012, 02:34 PM EDT
"The summit agreed that the EU’s permanent bailout mechanism could be used to directly recapitalize Eurozone banks." I would say that a "permanent" bailout means a grant instead of a loan. So where will the money for the grant come from? Where will the EU get money that no one expects to be repaid with interest? What can Germany do that Ireland can't? They can OK the printing of euros trading temporary inflation for long term stability. George Maynard Keynes would be proud that the reality of the situation and its obvious solution finally dawned on the EU. Here in the US, during our argument with Great Britain over taxation, Ben Franklin said that the ability to print paper money saved the revolution. The Continental Congress could print and spend as much as needed at face value during the war and later redeem it with hard currency at a bargain rate. Time to move your investments from Euros to dollars. At least until we take our own advise and print ourselves out of recession. Did you notice today that precious metals have stopped their slide and are increasing again. Somebody gets it.
citizen69 | Jun 29, 2012, 12:57 PM EDT
Anything that reduces the burden on the tax payer has to be a good thing... although it's probably the German tax payer who is going to pick up the tab for this again.
sirpeter | Jun 29, 2012, 12:43 PM EDT
Re-engineering of debt equals paying it back whenever.Crisis over and the drinks are on the EU.Éamonn chill out and have a double brandy ;))
EamonnDublin | Jun 29, 2012, 11:19 AM EDT
The debt still has to be repaid. And anybody who thinks that Kenny, Gilmore or Ms. Creighton had any impact on the talks is delusional. All that happened was that Spain got themselves a better deal than Ireland, and now the Irish situation has to be re-visited, as everybody should be seen to be treated in the same manner. Does anybody REALLY think that the three mentioned above are heavyweight negotiators? Caught in the headlights, back-slapping, wait and see what Spain gets and then we want some of that - and whatever you're havin' yerself, that's more like it. These guys are on loadsamoney for doing damn all: what Ireland needs is feet on the street, criminal prosecutions of the people who got us into this mess, and then proper politicians - not sons, daughters, nephews, nieces, widows etc. of dead, failed politicians. The problem with looking for that is ..... the daft electorate loves voting these gravy trainers in! Sad. And sadder. Dumb. And dumber! Éamonn, Dublin, Ireland.
johhnyb | Jun 29, 2012, 10:34 AM EDT
Portia. Then can we have the prosperity of the boom years back again?
Portia777 | Jun 29, 2012, 10:19 AM EDT
johhnyb So the debt has just disappeared. Great. I must try that with my credit card. I like the idea of 're-engineering' debt." there was no debt. The money the EU gave was created out of thin air and so has gone back into thin air.
johhnyb | Jun 29, 2012, 09:42 AM EDT
So the debt has just disappeared. Great. I must try that with my credit card. I like the idea of 're-engineering' debt.