Merkel Slams Irish Bankers for 'Damaging Democracy'

German Chancellor Angela Merkel
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German Chancellor Angela Merkel

Chancellor Angela Merkel forcefully condemned on Friday the conduct of Irish bankers who were caught on tape joking about a bailout deal and mocking Germany, saying their actions were an insult to working people and damaged democracy.

Transcripts of telephone conversations from 2008 between bankers at Anglo Irish Bank have caused outrage in Ireland and beyond in recent days.

In the tapes they made light of the Irish government's decision at the height of the global financial crisis to guarantee their liabilities and talk about demanding "moolah" - slang for money - from the country's central bank.

(Read More: Irish Opposition Calls for Bank Inquiry After Tapes Leak)

They were also heard singing the pre-war version of the German national anthem, with the words "Deutschland ueber alles".

Asked about the recordings at a European Union summit in Brussels, Merkel said: "For people who go to work each day and earn an honest living, this kind of thing is very hard to take, it's impossible to stomach.

(Read More: EU to Decide Who Pays When Banks Fail)

"This is really damaging to democracy, the social market economy and all that we work for," she said, adding that it made it harder for policymakers to convince their citizens to support aid for struggling European partners.

Ireland's government offered a blanket guarantee to Anglo and other lenders in 2008 to keep them operating. The decision eventually cost Irish taxpayers some 30 billion euros, forcing Dublin to seek a European bailout in late 2010.

(Read More: Europe Unable to Break Impasse on Who Pays When Banks Fail)

EU finance ministers agreed on Thursday new rules for dealing with failing banks which would hit shareholders, bondholders and wealthy depositors before taxpayers.

Germany, concerned it could be asked to rescue mismanaged banks in other European countries, has put the brakes on a push by some of its partners to create a single bank resolution mechanism and a deposit guarantee fund for the bloc.