Irish government figures have put the viability of the coalition on the line, as well as key strands of its economic policy, in talks on the debts of Anglo Irish Bank.
Such concerns are being taken seriously in Brussels, where officials acknowledge warnings from Dublin about a potential threat to the government.
Escalating pressure for an agreement follows the ECB’s refusal to back an Irish proposal to replace the Anglo promissory note IOUs with a long-term bond. This would cut the €3.1 billion annual payment, but the ECB fears it would violate the legal ban on printing money to finance Member States. Efforts are underway to rework the proposal, the aim being to settle on a scheme capable of withstanding any legal challenge in Germany.
European leaders meet in Brussels for a summit but the debate centres on the EU budget. While Taoiseach Enda Kenny and Tánaiste Eamon Gilmore are in Brussels today for pre-summit talks, the Irish case is not on the formal agenda.
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