Mr Hollande displayed an impressive grasp of the Irish situation when both leaders spoke outside the Elysée Palace afterwards, where they took far more than the advertised two questions, going into considerable detail. It was in marked contrast to the shock statement by Ms Merkel after last week’s summit when she announced no current bank debt would benefit from the EU’s rescue fund, the ESM.
When asked if this would not discriminate against Spain, Mr Hollande said that the Irish putting money into its banks added to its debt and this would have to be taken into account. "It’s up to Spain to put forward its own demand."
The Taoiseach spelt out very forcefully just why Ireland was a special case. "The banks have been recapitalised and Ireland was the first and only country that had a European decision imposed on it and had no alternative. There was not an opportunity to do anything else like burning the bondholders and the taxpayers had to service in full the debt."
No other country had to deal with such a situation, he said, and this was now recognised by President Hollande and Chancellor Merkel. "That is why the decision on the debt will take place once the legal framework is in place", he added. EU leaders agreed the legal framework would be completed by January.
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