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Enda Kenny
Enda Kenny speaks at the Fine Gael conference in Dublin. Photograph: Niall Carson/PA
Enda Kenny speaks at the Fine Gael conference in Dublin. Photograph: Niall Carson/PA

Ireland will not default on international debts, says Enda Kenny

This article is more than 12 years old
Irish prime minister tells Fine Gael party conference that republic will not vote no in referendum on European fiscal pact

Ireland will not default on its international debts or throw the EU's latest reforms into crisis by voting no in the upcoming referendum to the European fiscal pact, the republic's prime minister, Enda Kenny, has pledged.

At his party's first annual conference since Fine Gael swept to power with its highest ever vote in last year's general election, the taoiseach said there would be no celebrations over that victory "until Ireland has reason to celebrate".

There were scuffles outside Dublin's national convention centre on Saturday afternoon during a protest by 5,000 people. The demonstration was organised against the €100 (£83) household charge imposed on all homeowners in Ireland to pay for local government services. The government is introducing the charge as part of its austerity measures to balance Ireland's books and drive down the national debt.

Fine Gael delegates said one of their party members had been punched and heckled outside the centre because he resembled the environment minister, Phil Hogan, the cabinet member responsible for bringing in the household charge.

So far more than 800,000 householders have paid the €100 charge before the deadline closes on Sunday night out of a total of 1.2m people estimated to be liable for the tax.

On Ireland's international obligations, Kenny told delegates in his keynote speech that there was no possibility of Ireland reneging on its loan payments to Europe and the IMF.

He said: "Ireland will not default. But we are determined to ease this burden on our people. That's why we are negotiating with our Troika partners [the EU, IMF and European Central Bank] to find a cheaper way of financing the cost of bank recapitalisation."

Kenny said the Fine Gael-Labour coalition was already working to lower the cost of shoring up the country's broken banking system.

"That's why the €3.1bn promissory note payment due to be paid to Anglo Irish Bank on Monday is not being paid but is being replaced by long-term government bonds and the wider negotiations will continue."

He said the government's negotiations with the EU and the IMF over loans to Ireland had led to reductions in interest, saving the country €10bn.

Following the recent resignation of Bertie Ahern over his financial dealings with wealthy Fianna Fáil supporters and two major reports into political corruption, Kenny said his government was determined to break the link between business and political funding.

The forthcoming referendum to ratify the EU's new fiscal rules was a "brilliant opportunity" to say to the world that Ireland believed in the euro's survival and future, he said.

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