‘I think the ECB letters speak for themselves’ – Finance Minister Michael Noonan

Mr Noonan said the banking inquiry would reach a conclusion on any such issues, before adding: “I think the letters speak for themselves”.

Mr Noonan’s comments come after the letter was published today.

The European Central Bank threatened to cut off emergency funding to the Irish banks before the bailout, according to the contents of a letter sent to the former Minister for Finance, the late Brian Lenihan.

The secret letter threatened to cut off all funding, unless Ireland immediately applied for a bailout.

The letter was sent by then ECB President Jean Claude Trichet to the former Minister for Finance Brian Lenihan.

The letter was on November 19, 2010, stating that the Governing Council of the Bank could only authorise further liquidity funding assistance (ELA) to Irish banks if it received a commitment in writing from the Irish Government it would send a request for financial support to the Euro group.

The letter, which was published in today’s Irish Times, also stated the Irish Government had to make a commitment to make massive cutbacks in budgets and financial sector restructuring.

The letter stated that the restructuring plan had to include the provision of necessary capital to the Irish banking system and the Government had to underwrite the repayment of the liquidity funding to the Central Bank.

The ECB letter called for swift response from the Irish Government.

The letter was sent the day after the Central Bank Governor Patrick Honohan appeared on RTE’s Morning Ireland to state Ireland had no option but to apply for support.

It is understood there are three other letters in the correspondence between Jean Claude Trichet and Brian Lenihan in October 2010 and November 2010. The Governing Council of the European Central Bank is meeting today and the potential release of the letters is expected to be on the agenda.

Article Source: http://tinyurl.com/kbwqb42