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Yves Logghe/AP

ECB president: Fiscal Compact not ‘quid pro quo’ for deal on bank debts

But Mario Draghi says Ireland’s vote is a welcome affirmation of its priorities, and that market access could be close at hand.

THE PRESIDENT of the European Central Bank has indicated that the result of Ireland’s referendum on the Fiscal Compact was not intended as a bargaining chip for securing a deal on its banking debts.

Speaking to reporters after the bank’s governing council met in Frankfurt, Mario Draghi said he did not believe there was “any ground or statement for a quid pro quo” linking ratification of the deal to an arrangement allowing Ireland to restructure its banking debts.

“I think decisions ought to be taken for that they are,” Draghi said, “and that’s what we see”.

He added that the result of the referendum showed that “the Irish people consider fiscal consolidation, and fiscal stability, a basic pillar for growth and for further European integration”.

“It’s really a testimony of their responsibility, and for this they should be complemented.”

Later asked about the European Commission’s forecast for Ireland’s economic growth, Draghi commented that Ireland had already made “substantial” progress in both its fiscal consolidation and in restructuring its banking sector.

“We already see the signs,” the Italian said. “You see spreads going down for Ireland, probably much more than any other country.

“If one says that Ireland continues in these efforts, the return to market access is not a far distant perspective. It could actually be much closer than we all expected until, I would say, nine months ago.”

The meeting of the bank’s board of governors had earlier decided to leave the ECB’s main interest rates unchanged at its monthly meeting in Frankfurt – though the decision was not unanimous.

It had been speculated that the bank may have cut its rates by 0.25 per cent in order to stimulate economic activity within the eurozone.

Draghi had earlier said economic growth in the eurozone remained “weak” with “increased downside risk”, and called on EU leaders to consider their policies towards fiscal integration – hinting that the bank was not willing to take major policy decisions ahead of the meeting of the European Council in three weeks’ time.

To further underline this point, he argued that the ECB now stood “ready to act” when it was appropriate to do so.

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60 Comments
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    Mute David Widdis
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    Jun 6th 2012, 1:38 PM

    Money is flooding into the German Banks from Spain, Greece and other European countries, the German Banks are stuffed with money. The Germans are starting to spend and their property prices are rising.

    The rest of Europe is in dire need of an interest rate cut
    BUT in order not to further fuel the German market the ECB leaves rates unchanged and the rest of us get stuffed!

    European monetarily policy. One size fits Germany !!!!

    140
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    Mute Adrian Carey
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    Jun 6th 2012, 2:25 PM

    Germany needs interest rates higher to reign in its inflation. Correct they call the shots so no decrease.

    42
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    Mute Kerry Blake
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    Jun 6th 2012, 1:13 PM

    ECB does it’s bit to do nothing.

    104
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    Mute Stefan Hanrahan
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    Jun 6th 2012, 1:17 PM

    Talk about Draghing it out lol

    87
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    Mute Gavan Reilly
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    Jun 6th 2012, 1:18 PM

    Amazing. I’m using that as the hashtag now.

    72
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    Mute Thomas Mc Grory
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    Jun 6th 2012, 2:27 PM

    “It’s really a testimony of their responsibility, and for this they should be complemented.” Go and F*** Yourself

    71
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    Mute David Widdis
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    Jun 6th 2012, 3:48 PM

    Actually the current very high levels of money in the German banks has little to do with German savings.
    It is the result of massive capital inflows from other European countries,
    over a €100bn has left Spain in recent weeks.

    30
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    Mute Paul Mallon
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    Jun 6th 2012, 7:48 PM

    don’t get angry at him, did you honestly expect anything else? get angry at your government.

    14
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    Mute Jeffrey Derbyshire
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    Jun 6th 2012, 3:18 PM

    I knew it. Once the sheep had put their X in the box, Taoiseach would get a kick in the teeth by his Euro Buddies.

    Its past time for Ireland to rise up!

    66
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    Mute Kerry Blake
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    Jun 6th 2012, 2:43 PM

    We voted yes for the fiscal compact and all that it stands for. Why the hell would the ECB consider changing the terms of our bank deal considering the Irish people endorsed the program last week……

    62
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    Mute Tony Skillington
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    Jun 6th 2012, 3:11 PM

    Very very glad I voted no. Next referendum shoud be on weather we should get the hell out of the EU..the past months have shown that only Germany and Francehave a voice in Europe while countries like ourselves are treated like something the scrope off the end of their shoes. It’s going to be years before we see any deal on our bank debt so we’ll keep swinging in the wind.

    61
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    Mute Martin Grehan
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    Jun 6th 2012, 2:35 PM

    Draghi understands poker anyway. You don’t show your hand and then bluff which is what Kenny et al. are doing.

    53
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    Mute Ra's Al Ghul
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    Jun 6th 2012, 3:56 PM

    Just five days after the yes vote being carried the promise by the euro yes men that a yes vote would secure a deal on the bank debt is already falling through.

    43
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    Mute David Higgins
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    Jun 6th 2012, 5:21 PM

    The hope of a bank debt deal was raised AFTER the Yes vote, not during the campaign.

    10
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    Mute censored
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    Jun 6th 2012, 6:25 PM

    Nope: it was raised repeatedly by many yes supporters as a reason for a yes vote.

    “… and then we’ll get a debt writedown”

    24
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    Mute Norman Hunter
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    Jun 6th 2012, 6:46 PM

    David 30 May Lucinda Creighton TD in the Irish Times “a yes vote will strenghten the governments hand in getting a deal on the bank debt”.Maybe you should google it like i did.

    23
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    Mute David Higgins
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    Jun 6th 2012, 6:56 PM

    Strengthen our hand yes, but it doesn’t guarantee anything, and no one on the yes side ever said it would.

    3
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    Mute Scrap Croke Park
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    Jun 6th 2012, 6:56 PM

    In fairness to David, Kenny repeatedly stated the bank debt had nothing to do with the fiscal treaty, it was the No side linking the two.

    Which is why I was flabbergasted that the bank debt restructuring was the first thing out of his mouth during his victory speech after the referendum had passed.

    We are being led by a complete fool who doesn’t know what he’s talking about. He’s a national embarrassment and has been ever since Sarkozy played with his locks during their back slapping jostle.

    Gombeen. If Enda has an ounce of integrity or a single patriotic bone in his body he would hang his head in shame and stand aside

    23
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    Mute Sean O'Keeffe
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    Jun 6th 2012, 7:01 PM

    Any hope of a bank deal was finished as soon as the referendum carried.
    I feel sorry for poor Draghi having to deal with imbeciles, dumb enough to submit to the terms of the compact and then going looking for a deal.
    We must look like Europe’s answer to Forest Gump.

    16
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    Mute Kerry Blake
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    Jun 6th 2012, 7:06 PM

    In fairness Scrap Croke Park you have nailed him. Typical Kenny raises a hare on the bank debt on Friday and refuses to answer any questions on it in the house on Wednesday. Was listening to Drive Time this evening the political corr from the Indo (I think) was on and said Kenny led the house on a merry tour of Euro land mentioned many countries but left out Germany. Kenny spent 9 years on the opposition benches whinging about the lack of answers from the then leaders of the various FF governments of that time. Come his own time in government and he does the same thing…..

    15
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    Mute Too Trueleft
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    Jun 6th 2012, 7:21 PM

    David, can you explain how voting ‘yes’ strengthens our hand please?

    12
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    Mute Sean Frawley
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    Jun 6th 2012, 3:00 PM

    Great. Draghi laughing his ass off at us
    & a eunuch for a Taoiseach. Why don’t they send big Phil over there he seriously peed off most of this country he can’t but succeed if we send him to Europe………

    43
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    Mute Sean O'Keeffe
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    Jun 6th 2012, 6:53 PM

    Portugese might have him extradicted for non-payment of his property tax!

    18
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    Mute Gabor Cserni
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    Jun 6th 2012, 4:09 PM

    and the yes side blindly belived in what the government has said before the referendum…just another lie…

    40
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    Mute Tony Skillington
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    Jun 6th 2012, 4:34 PM

    Seriously lads…what did ye expect? They’ve been lying since the last general election. You don’t think they’re going to change over night do ye? Never, ever trust a politician…especially an Irish one. Pathalogical liars the lot of them….

    35
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    Mute David Higgins
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    Jun 6th 2012, 5:23 PM

    And what lie has taken place in relation to a bank debt deal?

    4
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    Mute Diarmaid Twomey
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    Jun 6th 2012, 6:15 PM

    David, can you answer a direct question? I have asked you now numerous times!

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    Mute censored
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    Jun 6th 2012, 6:29 PM

    Gilmore pretended to oppose the Lisbon treaty in public while actually supporting it.

    http://www.independent.ie/national-news/wikileaks/gilmore-took-opposing-views-in-public-and-in-private-2662663.html

    These latest BS pronouncements about trying to get a bank debt deal by Fail a Gael leader Enda Kenny and Gilmore are just more of the same lies for the optics.

    8
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    Mute Dave Harris
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    Jun 6th 2012, 7:54 PM

    Ah Jayzuz David, you really should be trying to avoid bringing up anything to do with lying when talking about FG….

    9
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    Mute Mark Andrew Salmon
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    Jun 6th 2012, 4:29 PM

    Where are all the Yes voters from last week gone then?

    34
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    Mute Rommel Burke
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    Jun 6th 2012, 4:48 PM

    Exams?;)

    18
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    Mute Sean O'Keeffe
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    Jun 6th 2012, 8:00 PM

    Group rate on an enema.

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    Mute censored
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    Jun 6th 2012, 8:01 PM

    Still partying? :D

    5
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    Mute Larry O'Doherty
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    Jun 6th 2012, 4:13 PM

    Now did you really think the politicians were telling the truth this time? I voted NO. It’s a club and we the ordinary people are paying the membership fee! Now Ireland……..bend over!!!

    34
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    Mute finbar m
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    Jun 6th 2012, 2:12 PM

    Well said David !!!!!!!

    30
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    Mute Tomas O Beag
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    Jun 6th 2012, 5:22 PM

    This government has not kept one promise from the election why did the yes voters think they would this time. Why would the eu change anything to do with our debt when every cent is being paid back ?

    19
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    Mute David Higgins
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    Jun 6th 2012, 2:30 PM

    At least the decision on the rate wasn’t unanimous.

    ECB Draghi: “A few members wanted a rate cut today – but not many”

    We desperately need a rate cut for struggling mortgages in Ireland. We also need it to get some inflation which will encourage spending and reduce the nominal value of our debts.

    18
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    Mute Rommel Burke
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    Jun 6th 2012, 3:41 PM

    Struggling mortgage holders – The number one priority for this FG led government on coming to power. Pass the sick bucket!

    50
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    Mute censored
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    Jun 6th 2012, 6:24 PM

    Maybe we shouldn’t just slavishly take whatever treatment our “partners” want to dish out then?

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    Mute David Higgins
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    Jun 6th 2012, 6:52 PM

    And what about all the bailout money they’ve dished out to us?

    5
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    Mute Norman Hunter
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    Jun 6th 2012, 7:04 PM

    Is it a bailout or a loan with interest?there is a huge difference as you’re no doubt aware.

    24
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    Mute Scrap Croke Park
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    Jun 6th 2012, 7:17 PM

    The bailout loan at an excessive interest rate is so we can continue to over pay politicians, public servants and welfare. And who will pay this back? The private sector. We’re supposed to be grateful?

    20
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    Mute Too Trueleft
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    Jun 6th 2012, 7:18 PM

    David, can you explain to us please how ‘getting some inflation’ will encourage spending?

    11
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    Mute Caroline Molloy
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    Jun 6th 2012, 8:08 PM

    What we desperately need is some leadership from FG. Some fresh thinking and innovation. Waiting for someone else to give us a rate cut is not a strategy. Neither is battening down the hatches until you’ve enough time in to draw your ministerial pension!

    7
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    Mute Paul Mallon
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    Jun 6th 2012, 10:50 PM

    Unless you’re planning to do something drastic things are just gonna keep on keeping on. None of these people give a flying fcuk what happens to you and yours.

    3
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    Mute Diarmaid Twomey
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    Jun 6th 2012, 6:14 PM

    Read an interesting piece (courtesy of a poster here) in Spiegel where a German economist was basically telling his fellow countrymen that they should get a grip and jump off their high horse. To all those who may label me a racist, HE went as far to say that Greece should call in their WW2 reparation money that countries from around the world have let Germany off on. He also pointed out that its a bit rich for Germany to lecture fiscal prudence when they defaulted three times in the 20th century. He noted that European “partners” could bankrupt Germany in the morning if they called in monies owed in reparation funds. Interesting point of view for a German and somewhat welcome relief to know at least one leading German knows humility!

    On a side not, Yes men, hang your heads in shame! Germany and now the ECB have given ye the 2 fingers. Congrats!

    18
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    Mute Fagan's
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    Jun 6th 2012, 6:19 PM

    There is an excellent presentation on Germany’s liabilities at the moment. if the Euro crisis passes off without a collapse, then Germany is looking at a 550 bn cost as things currently stand. If it fails then the sky is the limit.

    Good post Diarmaid. I don’t agree with people throwing the holocaust in to the face of modern Germany every time but it is important to point out that they have 2 of the biggest defaults of the last 100 years and one medium size one. They robbed Greece blind and left it an economic shell, a destroyed nation that fell in to civil war and dictatorship. They have forgotten their economic history.

    11
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    Mute Shayno ZO
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    Jun 6th 2012, 6:39 PM

    Do you have a link for that please?

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    Mute Diarmaid Twomey
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    Jun 6th 2012, 9:54 PM

    Sorry Shanyo can’t seem to find it on Google, I will go back through the articles online here as it was actually posted as a comment link in an article here as far as I can remember!

    1
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    Mute Matt Donovan
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    Jun 6th 2012, 7:03 PM

    Vote yes for stability??? Good aul ECB, putting the stab into stability.

    14
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    Mute Paul Mallon
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    Jun 6th 2012, 10:55 PM

    It’s not your stability they’re talking about, it’s theirs.

    2
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    Mute O'Reilly
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    Jun 6th 2012, 6:45 PM

    It was never claimed a YES vote would impact on the banking debt. In fact it was shouted from the rooftops that it had nothing to do with bank debt so the NO camp need’nt bother claiming otherwise. Ireland will get its bank deal. Unfortunately though, it requires a bigger nations strife to secure. Spain will fill that void and we will get a deal retrospectively…

    5
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    Mute Norman Hunter
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    Jun 6th 2012, 6:56 PM

    O Reilly see my post to David Higgins reference 30 May Irish Times.

    8
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    Mute O'Reilly
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    Jun 6th 2012, 7:03 PM

    And she is right. But it doesn’t impact our current bank debt. Imagine saying F*&k off, any chance of a write down? Also, no one is going to say anything in public that would suggest any country has a bargaining chip. What’s more important here is what’s going on in the background…

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    Mute Norman Hunter
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    Jun 6th 2012, 7:09 PM

    Whats the point after the vote any chance of running another vote in return for a deal is gone.I take it you heard Mr Dragi.Bascially why give a deal when the Irish said “sure its grand as it is”.

    8
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    Mute Sean O'Keeffe
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    Jun 6th 2012, 7:24 PM

    O’Reilly’s correct. Our only hope of getting a deal on the bank was to reject the treaty.
    Granted, we were then relying on the negotiating skills of Forest Gump Kenny & German Bunds Noonan, but at least we’d have something to negotiate with.
    Begging bowl served us well up until now?

    13
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    Mute Michael J Hartnett
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    Jun 6th 2012, 9:07 PM

    Our options are limited now & all this talk about yes/no votes is pointless. The only important thing to do is to bring down this government. So thats the next challange get rid of them.

    4
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    Mute john g mcgrath
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    Jun 6th 2012, 9:24 PM

    Any the way is the weakest link Labour

    1
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    Mute Eoin Faz
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    Jun 7th 2012, 1:11 AM

    Why bother returning to open market, we should have ECB funds as long as any other country does!

    1
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    Mute Paul Mallon
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    Jun 7th 2012, 7:01 AM

    That’s exactly what they want.

    1
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