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Eamonn Farrell/Photocall Ireland

'Take a bailout or we'll cut emergency funding' - ECB to Ireland in 2010

The infamous letter from Jean-Claude Trichet has finally been released.

Updated 3.25pm 

THE EUROPEAN CENTRAL Bank told Ireland to take a bailout or face losing emergency funding, according to a four-year-old letter published for the first time today.

The 2010 letter from then-European Central Bank president Jean-Claude Trichet to then-Finance Minister Brian Lenihan is carried in today’s Irish Times.

Sent on 19 November 2010, it says that the ECB would only continue to fund Ireland if they received “in writing a commitment” that Ireland would apply for a bailout.

The ECB has this afternoon published four previously unreleased letters between the ECB and Lenihan, including the 19 November 2010 one, following a meeting of its governing council.

In a statement the ECB claims that the letters and documentation show that it was  not the Trichet letter that “pushed Ireland into the programme” but rather it was the scale of the domestic financial crisis.

“The documentation also shows that in the run-up to the application for support and throughout the Irish programme, the ECB has continued to support the Irish banking system and the Irish economy in an unprecedented manner,” the ECB said.

Key points

  • ECB letter threatened Irish funding unless a bailout was accepted, demands a “swift response”. 
  • Current ECB president says that the ECB did not force Ireland into a bailout
  • Noonan says letter is “vital” for banking inquiry
  • Howlin says it will “come as a shock” to many
  • Taoiseach says “die was cast” in 1997
  • Burton says letter reminds her of “personal friend” Brian Lenihan
  • FF’s Michael McGrath says Ireland was bullied into a bailout.

The letter from Trichet to Lenihan came just a day after Irish Central Bank governor Patrick Honohan had gone on Morning Ireland to say Ireland had no choice but to apply for a bailout.

It finishes by pressing Lenihan for a “swift response” before markets opened the following week.

The assessment of the Governing Council on the appropriateness of the Eurosystem’s exposure to Irish banks will essentially depend on rapid and decisive progress in the formulation of a concrete action plan in the areas which have been mentioned in this letter and in its subsequent implementation.

Speaking at a press conference earlier, current ECB president Mario Draghi, insisted: “The decision to ask for a programme was the government’s decision, it was not the ECB forcing the government to do this.”

“I think the four letters show exactly the sort of dialogue that took place between the government and the then president of the ECB Jean Claude Trichet. So for me there is very little to add to that.”

Screen Shot 2014-11-06 at 15.25.26 Mario Draghi earlier today ECB ECB

Freedom of Information

Up to now, requests to release the letter under the Freedom of Information act – including one made by TheJournal.ie – had been rebuffed by both the Department of Finance and the ECB.

On his way into a meeting of the Economic Management Council this morning, the Finance Minister Michael Noonan told reporters that the letter would be “vital” for the forthcoming banking inquiry.

Public Expenditure and Reform Minister Brendan Howlin said that the letter “will come as a shock to many people”.

Speaking today at Government Buildings, the Taoiseach Enda Kenny said that by the time the letter had been sent in November 2010, the country was already off track.

“I think that the root of our problem began at the 1997 election. At that stage, the country was lean, competitive and had a good cost base. But all was let go to the wind by the assumption that the country could be run on taxes from property.

“By the time the letter was sent, the government of the day and the central bank had been on Irish radio saying the IMF were in Ireland.

The die had been cast.”

Kenny said that the letter was a reminder of how far the country has come.

Tánaiste Joan Burton said that the letter was a reminder of the deceased Lenihan, whom she called “a personal friend”. She added: ”It brings it back in a very poignant way.”

Leinster House reaction

At Leaders’ Questions, in the Dáil the independent TD Catherine Murphy claimed that the release of the Trichet letter was designed to ”knock Irish Water off the front pages of the newspapers”.

Burton said she hoped the release of the Trichet letters will “free up” some witnesses at the forthcoming banking inquiry “to speak more freely”.

Speaking to reporters at Leinster House, Fianna Fáil’s finance spokesperson Michael McGrath said the correspondence was a “clear, direct threat” from the ECB.

“What we had here was a powerful European institution in my view exceeding its mandate and essentially bullying a sovereign government into accepting bailout,” he said.

He said that the government should used the now-released correspondence “to strengthen our hand” in negotiations on seeking retrospective recapitalisation of Irish banks.

- additional reporting by Hugh O’Connell

First published 7.20am

Read: Here’s when we’ll find out if that infamous Trichet-Lenihan letter will be released

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270 Comments
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    Mute Gordon Hughes
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    Jan 5th 2020, 9:04 AM

    Best way to dispose of a Christmas tree is to bring it out your back garden and launch it in your neighbours garden, then act like you know nothing about it if they say anything, this is also a green eco friendly way too as you don’t need to drive anywhere in your car …. Your welcome

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    Mute Fergal O'Hagan
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    Jan 5th 2020, 10:20 AM

    @Gordon Hughes: *YOU’RE

    85
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    Mute Gordon Hughes
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    Jan 5th 2020, 11:16 AM

    @Fergal O’Hagan: you’re boring…. See I learn quickly

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    Mute Fergal O'Hagan
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    Jan 5th 2020, 11:50 AM

    @Gordon Hughes: you are welcome!

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    Mute Gordon Hughes
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    Jan 5th 2020, 4:50 PM

    @Fergal O’Hagan: you are still drab.. I’m flying now

    12
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    Mute Sean Ryan
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    Jan 5th 2020, 9:29 AM

    My local secondary school offers collection and disposal for €10. The boys collect it and the profit goes towards the school football club.

    158
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    Mute Jane Alford
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    Jan 5th 2020, 10:31 AM

    @Sean Ryan: Best to let it completely dry out first…

    6
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    Mute Vladimir Macro
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    Jan 5th 2020, 10:37 AM

    @Sean Ryan: scandalous

    6
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    Mute Wheresmyjumper
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    Jan 5th 2020, 9:17 AM

    I’m throwing mine over the back wall and letting nature take care of it, it’s a tree i reckon driving it to the council drop off would have more of a negative impact on the environment

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    Mute Gordon Hughes
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    Jan 5th 2020, 11:21 AM

    @Wheresmyjumper: I said that already

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    Mute Tim McCormack29
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    Jan 5th 2020, 8:06 AM

    I am going cut it up and burn it in my stove..

    231
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    Mute dublindamo
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    Jan 5th 2020, 9:32 AM

    @Tim McCormack29: didn’t think this type of green tree was good for a stove

    38
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    Mute Gussy Hughes
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    Jan 5th 2020, 10:03 AM

    @dublindamo: Ah damo, it’s only once a year. Everything in moderation!

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    Mute Whoswho
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    Jan 5th 2020, 3:26 PM

    @Gussy Hughes: Who answers all these polls? Get a life!

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    Mute Brendan Doherty
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    Jan 5th 2020, 10:08 AM

    Mine is recycled in the attic ready for next year no harm to the environment at all

    51
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    Mute Marie Louise Ryan
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    Jan 5th 2020, 11:43 AM

    @Brendan Doherty: only its made of plastic

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    Mute Chris lynch
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    Jan 5th 2020, 11:47 AM

    @Marie Louise Ryan: a plastic one is environmentally neutral if you keep it for about 10 years. Wasn’t there an article here about that recently?

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    Mute Colm Curran
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    Jan 5th 2020, 9:52 AM

    I’ll treecycle mine I’ll get my coat

    40
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    Mute Shane Freeney
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    Jan 5th 2020, 9:40 AM

    My Goats are loving it they will be munching for days

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    Mute Aonghus OReilly
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    Jan 5th 2020, 11:47 AM

    @Shane Freeney: You said goatmunching.

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    Mute Eugene Comaskey
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    Jan 5th 2020, 10:29 AM

    Trees melt away after they are felled if left alone , just throw it at the back of the ditch.

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    Mute Liam Mc Meel
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    Jan 5th 2020, 8:07 AM

    No

    20
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    Mute Misty Eyed Mutton
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    Jan 5th 2020, 4:09 PM

    One of my footmen is towing the 60 footer as I type.

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    Mute Datalore
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    Jan 5th 2020, 9:54 PM

    Bound mine in a few black refuse sacks and brought it to Corkagh Park. Looks like a body bag

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    Mute Anthony Mc Donald
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    Jan 5th 2020, 3:50 PM

    I don’t buy fresh Xmas trees have my personal reasons as in environmentally

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    Mute Morning Gus
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    Jan 5th 2020, 10:15 PM

    Why do you want to know this?

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    Mute Garykelly
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    Jan 5th 2020, 10:25 PM

    Yeah we heard you the first time chief

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    Mute Rory M
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    Jan 5th 2020, 11:56 AM

    There is lots of drop of points for old real xmas trees and its usually designated to the corner of a field The Council , corporation , fingal etc all are involved and the shredded trees get re used in the gardening sector , so it makes sense to look up your local authority NO MATTER whether your on Southside, Northside or any part of dublin .
    USE AND RECYCLE

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    Mute Datalore
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    Jan 5th 2020, 9:54 PM

    Bound mine in a few black refuse sacks and brought it to Corkagh Park. Looks like a body bag

    1
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    Mute Datalore
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    Jan 5th 2020, 9:54 PM

    Bound mine in a few black refuse sacks and brought it to Corkagh Park

    1
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    Mute Morning Gus
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    Jan 5th 2020, 11:07 PM

    @Datalore: Come again!!!

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