independent

Monday 21 April 2014

Government marks the end of the three-year Troika bailout

Economic and Monetary Affairs Commissioner Rehn addresses the European Parliament Economic and Monetary Affairs Committee in Brussels...Economic and Monetary Affairs Commissioner Olli Rehn addresses the European Parliament Economic and Monetary Affairs Committee in Brussels April 25, 2013. European Union countries will continue to consolidate public finances, but they can now afford to do that at a slower pace than before, because their previous efforts have won them back some market credibility, the EU's top economic official said.   REUTERS/Yves Herman (BELGIUM - Tags: POLITICS BUSINESS)...I
The EU Commission vice-president Olli Rehn also admitted that mistakes were made at the time.

The Government is to mark the end of the three-year Troika bailout today as the programme formally expires on Sunday night.

Today is the last working day of the Irish programme, the third anniversary of application approval by the board of the International Monetary Fund.

Over this austere period, several months of meetings with Troika officials were held, 260 programme actions were completed and a total of €67bn was borrowed to set the country's economy on the right path.

The yield on Government bonds is now at 3.5pc, down from a peak of 14.5pc.

Meanwhile, EU Commissioner Olli Rehn admitted for the first time that he was shocked when he was first told about the scale of Ireland’s bank debt.

“I remember very well the meetings with the late Brian Lenihan in this room and in the next room, in my office, where we discussed for the first time the seriousness of the situation in Ireland in September 2010,” Olli Rehn told RTÉ’S Prime Time last night.

“I must say that, even though I was quite prepared to hear large figures, I was quite shocked when hearing that the capital hole is around 60 per cent of GDP.”

The EU Commission vice-president also admitted that mistakes were made at the time.

“In retrospect I think it is quite easy to spot some mistakes like the blanket guarantee for banks, but that is now water under the bridge and now we have redirected the river and we are on a better place for the moment,” he said on the current affairs show.

But Rehn also said Ireland’s current economic situation is “actually quite promising”.

“While Ireland is not completely out of the woods yet, it is still on a very good and sustainable path,” the Finnish politician said.

“So my main feeling is of relief on behalf of the Irish people and also confidence as regards the future of Ireland and its people.

“Ireland is at the critical juncture,” he continued.

“It has recently experienced an economic turnaround. The recovery has returned and the economy is now growing. And it is now important to strengthen the foundations of recovery and growth.”

But he warned that it was critical the country sticks with the austerity policies.

“It is essential to stay the overall course of economic adjustment as well as ensure the sustainability of Irish public finances - these are the critical things,” he told the RTÉ panel.

Rehn also said that he does not expect any nasty surprises from next year’s stress tests of the Irish banks.

“I believe that they should not reveal new black holes or capital holes,” he said.

“The recent balance assessment has been done effectively and credibly and in our view these balance sheet assessments show that the Irish banks are now in a healthy and resilient position.”

However, Rehn appeared less confident when asked about banks elsewhere in the Eurozone.

“I think it is better first to analyse and then comment. Of course by definition if we are conducting an asset quality review and stress test we have some latent or potential concer,” he said.

“But it is better if we first examine and analyse and draw our conclusions before we make sweeping statements in public about the state of health of European banks.”

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