Kenny And Merkel Release Bank Debt Statement

Taoiseach Enda Kenny and the German Chancellor Angela Merkel have issued a joint communiqué saying that Ireland's banking crisis was "unique" and that Ireland was to be considered a special case in the forthcoming negotiations over the role of the new bailout fund, the European Stability Mechanism, in supporting troubled banks.

It is understood the statement followed a phone call between the two leaders on Monday afternoon.

It comes after two days of opposition attacks over Ms Merkel's apparent rejection on Friday of the ESM being used for so-called legacy debt.

As the EU summit was winding up at the end of last week, Ms Merkel, in response to a question about Spanish banks, said there would be no retroactive recapitalisation of banks by the ESM.

Her remarks triggered a barrage of opposition attacks against Mr Kenny, who had hailed the summit as a success.

The statement did not spell out that legacy debt will be covered but it will provide the coalition with some badly needed cover following the criticism it has taken since Friday lunchtime.

(H/CD)