Brian Lenihan made a comment on Morning Ireland to the effect that it would be against Irish and EU Law to treat Anglo's depositors and senior debt holders in different ways.
You can't pay back the depositors and not the senior debt holders.
I'm surprised this hasn't been debated more, as it really goes to the heart of the Anglo catastrophe. If he's correct, the only way the next Government could get out of the Anglo stranglehold would be by leaving the EU, which isn't something FG or Lab are going to do.
As things stand, there is €16.5bn outstanding in senior debt (Emmet Oliver claims this is owed to European and UK pension funds Emmet Oliver: Defaulting on Anglo debts now on agenda - Analysis, Opinion - Independent.ie).
There are 3 options in relation to this:
1. Pay up
2. "Renegotiate" it
3. Force a debt-to-equity swap
At 30c on €1, the latter 2 options will save the taxpayer €11.5 on the Anglo bill, which would equate to a €2bn fiscal correction each year for 10 years as opposed to a €3bn correction each year for 10 years (not counting INBS or other recap costs; this relates to Anglo alone).
First off, what Irish and EU law is Lenihan talking about?
Secondly, do posters agree that €11.5bn is realistically the maximum that can be saved by this 'default'?