Ireland reaches deal with ECB on banking debt

Ireland has reached a landmark deal with the European Central Bank to re-structure the massive debts of the former Anglo Irish Bank, Prime Minister Enda Kenny said on Thursday. Kenny said the deal would transform short-term lending in promissory notes into longer-term bonds, reducing the repayment pressure on Ireland, which is struggling to recover despite an EU-IMF bailout in 2010. Ireland was determined to lessen the burden from a 31-billion-euro ($41.9-billion) promissory note -- effectively a high-interest IOU that was pumped into Anglo Irish Bank to rescue it during the financial crisis. Kenny told parliament that with interest, the cost of the deal over its lifetime would have been almost 48 billion euros -- they were "a highly onerous and unfair legacy of the banking crisis". "I am pleased to announce that today that Ireland has reached a conclusion to its discussions with the European Central Bank that delivers on our commitment to put in place a fairer and more sustainable arrangement," Kenny said. "Under the agreement reached today... the promissory notes are being exchanged for long-term Irish government bonds with maturities of up to 40 years." In the early hours of Thursday, Irish lawmakers voted through emergency legislation to liquidate Anglo Irish, now known as the Irish Bank Resolution Company, and the former Irish Nationwide Building Society. Kenny said the deal "bookends a tragic chapter in our country's history" and had removed "stains on our international reputations".