Friday 9 December 2016

Boost for Government as EU/IMF/ECB agrees to look at options on €30bn in Anglo debt

Lyndsey Telford

Published 19/01/2012 | 14:14

Finance Minister Michael Noonan. Photo: Tom Burke
Finance Minister Michael Noonan. Photo: Tom Burke

GOVERNMENT plans to reduce and restructure €30bn in debt related to Anglo Irish Bank, now the IRBC, were given a boost today when the EU/IMF/ECB troika agreed to look at alternative ways of paying it back.

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Debt repayments of €3bn per annum are due to be paid over the coming years in relation to Anglo promissory notes or IOUs but the troika has agreed to draw up a common paper with alternatives to this arrangement over the coming weeks.

It could mean lower interest rates and/or longer repayment times which would take some pressure off the economy in the future as it struggles to grow but any agreement will need the backing of all 27 European member states.

The troika team has also given the Government more time to sell off its state assets to raise money in a bid to offset some of the country's debt.

The Government announced there has been no timeline set by the EU, IMF and European Central Bank, despite being pressured in the past to sell off profitable state-owned companies like the airport authority and energy businesses to free up €5bn.

Public Sector Reform Minister Brendan Howlin said this was not a failure on the Government's part to meet targets set, because there was never a definitive timeline.

The review team announced today that the Government had reached all its targets in its assessment of the country's austerity measures one year after the bailout.

"The school examiner is the Troika so I'll let them pass judgment on that," said Mr Howlin.

Michael Noonan said the Government has met all the targets set by the EU, IMF and European Central Bank exactly one year after the bailout.

He said while the Government is delighted to have been deemed on track, looking after citizens and job creation is the priority.

"The Government wants to make sure that the provision of quality public services is not subject to the every whim of the international money markets," said Mr Noonan.

In a statement, the EU/IMF/ECB said:” In this more challenging environment, maintaining Ireland’s track record of strong program implementation remains key to sustaining recovery and achieving Ireland’s return to capital markets.

“Accordingly, the authorities priorities in first half of 2012 include publishing a fiscal responsibility bill to underpin the achievement of the budgetary consolidation.

“They are also working with lenders to promote efforts to address loan arrears, and they will publish a modernization of personal insolvency framework.

“The authorities are also strengthening the effectiveness of activation and training policies to help job seekers get back to work.”

Earlier, in the Dail, Tanaiste Eamon Gilmore said the Government was not interested in getting a gold star from the "Troika" following its review after the €67.5bn rescue programme.

He added the goal was not to win favour with the European Union, International Monetary Fund and European Central Bank, but to see the country progress and the economy grow.

"It's not about getting gold stars," said Mr Gilmore.

"As far as we are concerned, it's another milestone on the way to recovery.

"For the first time in four years, the Irish economy is growing again."

Sinn Fein TD Mary Lou McDonald accused the Government of caring more about pleasing the so-called Troika overseeing the bailout than helping citizens.

Mr Gilmore urged Sinn Fein to put on a green jersey in support of Ireland.

"It would be helpful if on this occasion you were to pull on a green jersey and assist the Government," he said.

Ms McDonald said it was perverse to ask people to do so while the Government was imposing such austere cuts to education, health and social welfare.

Mr Howlin said the Government has also managed to negotiate with the Troika to allocate €2bn that will eventually be raised by the sale of state assets to job promotion.

It was originally dictated that all money was to go towards paying off the county's European debt.

"We have in previous interactions with the Troika been pushing this point," said Mr Howlin.

"When we came into Government, the position was that no money could be spent on anything except freeing up our debts.

"We have been consistent in pushing that and I'm glad to say we made progress in that regard."

The minister insisted that being given more time to sell the country's assets was in no way considered a failure.

"There was no requirement by the end of 2011 to sell any State assets. What's understood is there will be an ambitious programme of State asset sales and we are working towards that," said Mr Howlin.

"We're not going to do any fire sales and we are not going to do anything that would strategically damage the economy's means of going forward."

Companies that will eventually be sold are expected to include ESB, Bord Gais, Aer Lingus and Bord na Mona.

In response to Mr Howlin's claims, the Commission refused to confirm whether it has changed its position on the sale of State assets to allow a portion of money raised to go towards job creation.

Istvan Szekely, director of economic and financial affairs at the European Commission, said plans had not yet been finalised about the Irish proposals.

"We would like to understand their plans for asset sales and I understand this is in the process," said Mr Szekely.

"When we see the plans we will encourage the authorities to be ambitious. Once we see an ambitious programme there then we can sit down and discuss matters."

Mr Howlin revealed that a group is currently putting together a strategic plan for the sale of State assets, which he expects to report by the end of February.

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