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Sunday 11 December 2016

Government at odds with troika over €2bn job creation spend

Lyndsey Telford

Published 19/01/2012 | 18:36

THE IRISH Government is at odds with those heading its bailout amid claims it has struck a deal to spend €2bn from the sale of State assets on job creation.

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As authorities in Dublin passed the year one review test, Public Sector Reform Minister Brendan Howlin claimed an agreement had been reached to use some profits from a swathe of privatisations.



But a spokesperson for the Troika - the European Commission (EC), International Monetary Fund (IMF) and European Central Bank (ECB) - denied such an arrangement has been signed off.



Mr Howlin claimed the Government had successfully reversed demands that profits go solely towards debt repayments and struck a new deal agreeing that a portion is used for employment.



"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."



Istvan Szekely, director of economic and financial affairs at the EC and spokesman for the Troika, argued that the Government was still in the process of drawing up plans for the sale of State assets, which will be submitted to Europe by the end of February.



The EC, IMF and ECB review team was in Dublin to announce that Ireland had met all the targets for year one of its 85 billion euro bailout package, meaning the next tranche of the bailout - 3.2 billion euro - can be released.



The EC, however, refused to back up the Minister's claims, saying that it is still waiting to see the strategic assets sale plan from the Government..



"When we see the plans we will encourage the authorities to be ambitious," Mr Szekely said.



"Once we see an ambitious programme there then we can sit down and discuss matters."



The Troika confirmed that the Government has been given more time to sell off its assets. It was originally feared that the EC, IMF and ECB would pressure Ireland into a firesale of companies, believed to include ESB, Bord Gais, Aer Lingus and Bord na Mona.



Mr Howlin insisted a timeline was never set and that by having more time, the Government will be able to make strategic decisions based on value for money.



"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," he went on.



"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."



Mr Szekely said the economy is expected to continue to grow in 2012.



"The Irish economy has returned to growth reaching 1pc and is expected to grow in 2012, albeit at a slower rate than we predicted before at some 0.5pc," he added.



He also confirmed that the Government was well within its fiscal deficit target of 10.6pc, reaching 10pc.



Meanwhile, the Government has faced continued criticism from the opposition over the austerity measures imposed in order to meet its bailout masters' targets.



Sinn Fein, Fianna Fail and Independent TDs have argued that it has allowed the Troika to dictate budgetary measures - at the expense of Irish citizens who have been forced to endure severe cuts to education, health and social welfare.



Up to 3,000 teachers, parents and pupils from south inner city Dublin marched in opposition to the Government's cuts, protesting that disadvantaged schools are being unfairly attacked.





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