PARIS (MNI) – Ireland’s Finance Minister Michael Noonan believes
that a 2010 letter from former European Central Bank president
Jean-Claude Trichet to the Irish government threatening to pull the
liquidity support for Irish banks if the government did not seek a
bailout should be released publicly now, according to a press report.
Speaking to the Sunday Independent newspaper, Noonan said he had
seen the “very direct” letter from Trichet to Ireland’s then-finance
minister Brian Lenihan, which left him “little or no option” but to seek
the E85 billion bailout.
Noonan told the newspaper that the Trichet letter implied ECB
liquidity support would also be pulled if Ireland sought to force losses
on senior unsecured bondholders of troubled banks.
Ireland has pumped E64 billion into its banking system since 2009,
much of it because of the ECB’s reported insistence that senior bond
holders be paid off because of Trichet’s worries that contagion from
Ireland’s banks could spread to the rest of the Eurozone.
Noonan said that the letter should be released to a banking inquiry
examining the events leading up to Ireland’s bailout.
“The banking inquiry that has been signalled to me seems like an
appropriate place to release this letter, which I’m sure would be very
helpful to it,” Noonan told the newspaper.
The ECB’s reported efforts to pressure Ireland into a bailout in
2010 have become increasing controversial. One well-known economist,
Colm McCarthy, has called for Ireland to sue the ECB in the European
Court of Justice for exceeding its mandate by forcing Irish taxpayers to
bail out unsecured bondholders.
–Paris newsroom,, +33142715540; jduffy@marketnews.com
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