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Honohan rejects Kelly criticism - The Irish Times - Sun, May 08, 2011

In particular, Prof Honohan disputed the suggestion that the bank guarantee could have been reversed. "I took a lot of legal advice on this. There was no way of the Government walking away from that very formal guarantee, endorsed by the Oireachtas," he said. "The Government would have been treated as a bankrupt right away."

Prof Honohan said his strategy has been to keep Ireland's options open in what is a difficult position, and not to undertake further costly engagements. "To a large extent we have been successful in doing that," he added.

Mr Honohan said the deal struck with the IMF and European authorities last November was agreed in a hurry and designed to be altered.

"It was not a final solution," he said. "I would regard it as a holding operation, something to offer a window of time in which to get what could be sorted out within our own competence in Ireland sorted out.

"It's not the end of the story. Negotiations, discussions will continue with Europe for a long time to come as we know there are already discussions about the interest rate and so forth."

Prof Honohan said he wanted to nail the idea that there is a conflict of interest between heading the Central Bank and having a role on the governing council of the European Central Bank.

"Everything that was done here by me and by colleagues on behalf of Ireland - I was playing for Ireland," he said.

Mr Honohan also addressed his breaking rank last November in an early morning phonecall to RTÉ Radio from a meeting of European bank chiefs in Frankfurt  to reveal that Ireland was on course for a bailout running to tens of billions.

"The facts of the matter are pretty clear, because the negotiators for the lenders were in Dublin with snow on their boots. They had been invited by the Minister for Finance," he said. "What my purpose there was, and I said it at the time, was to provide reassurance and fact,



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun May 8th, 2011 at 11:04:42 AM EST

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