Thursday 23 March 2017

Central Bank Governor expects multi-billion euro loan

Central Bank Governor Patrick Honohan today said he expects the country to get a loan worth tens of billions through an International Monetary Fund-European Union rescue package.

But Professor Honohan said he believes influential IMF-EU experts will not demand any radical alteration of the Government's savings plans once they inspect Exchequer and bank books.

"It's not my call. It's the Government at the end. It's my expectation that that is what is likely to happen," he told RTE Radio.

Irish financial chiefs will today lock horns with IMF-EU officials on options to bail out the banks and drag the country from economic meltdown.

The Government will open its debt-ridden books at a series of meetings over the next seven to 10 days as the harrowing spectre of a multibillion-euro rescue looms over Dublin.

Despite the daunting arrival of IMF specialists, the Government - reluctant to accept the need for outside assistance - maintained that it has not asked for or been granted financial aid.

Taoiseach Brian Cowen said talk of a bailout belittles Ireland.

Professor Honohan, at a meeting of Central Bank colleagues in Frankfurt, said he expected talks in Dublin to lead to the loan.

"I think this is the way forward," he said.

"I don't see it as something that is really worrisome or should lead to a huge change in direction."

Detailed talks will centre on two fronts - plans for €15bn savings over four years and next month's €6bn slash-and-burn budget as well as the damage done by the banking black hole.

It has been estimated that the banks need €50bn to survive but the losses are compounded every month by worsening bankruptcies, mortgage arrears, a run on deposits and loan defaults.

In some quarters the bail-out numbers being speculated are as high as €90bn.

It is understood an IMF team laid the groundwork yesterday in the offices of the Central Bank for a trawl of Irish state banking records.

Britain has already stepped up to the plate with Chancellor George Osborne stating that Treasury chiefs were considering all options for financial aid to Ireland.

The Dublin talks follow two days of discussions in Brussels involving eurozone and EU finance ministers and heated debate across Europe over a way forward for Ireland.

Those sitting down include IMF experts, the European Central Bank and European Commission officials.

Putting the Irish case will be Department of Finance officials, financial regulator Matthew Elderfield and the Central Bank.

Press Association

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