BERLIN Dec 8 Ireland's central bank chief
Patrick Honohan told a German newspaper he is confident a deal
on his country's legacy bank debt is possible, and that Dublin
requires more time to repay the debt in order to safeguard its
wider aid package.
Ireland is lobbying the European Central Bank (ECB) to
restructure 31 billion euros in promissory notes - a form of
high-interest IOU - used to recapitalise the former Anglo Irish
Bank, now called the Irish Bank Resolution Corporation.
Honohan said he hoped a deal would be done ahead of the next
repayment, which is due in March.
"The planned repayment of the European Central Bank's aid
comes at the wrong time. The government is trying to win back
trust on the debt market, and current repayment plan is
complicating this," Honohan told the Frankfurter Allgemeine
Zeitung in an interview published on Saturday.
"Of course the money will be paid, but it should happen over
a longer time frame. That would make much more sense given the
wider aid programme for Ireland. We need more time," he added.
Ireland's leaders and people have been widely praised by
European policymakers for acting decisively to cut national
spending when the country's crisis began.
A deal on the promissory notes would help secure successful
budget consolidation. The main thing was to negotiate a
sustainable plan, which would "lengthen the repayment deadline
considerably," Honohan said, without suggesting a time frame.
Asked why the ECB was cautious, Honohan said: "Whatever is
done, it must be ensured that it cannot be seen in any way as
state financing. Legally it must be absolutely water-tight. It
is complex, but in my opinion this is possible," he said.