IMF-EU plan forces State to come clean on its loans
Published 09/02/2011 | 05:00
AS part of the IMF-EU programme, all government departments and state agencies have been told to disclose all their outstanding borrowings by the weekend.
The agencies and departments must disclose all "current encumbrances'' by close of business on Friday, a circular from the Department of Finance has made clear.
From now on any fresh borrowing done by a department, local authority or state agency can only happen with the express permission of the Department of Finance.
These changes have been demanded by the terms of December's €85bn EU/IMF bailout programme. The Department of Finance's central capital unit will now handle all requests for fresh borrowing.
Minister for Finance Brian Lenihan has written to secretary generals at all government departments informing them of the new system. "This is required to comply with the loan agreements with both the EFSM and EFSF under the EU-IMF support programme,'' the instruction from Mr Lenihan makes clear.
From now on the Department of Finance will maintain a register of debts at each department and state agency in an attempt to streamline and tighten up the management of the public finances. No previously unknown exposures are expected to emerge from the trawl, sources said.
The list of public bodies who must comply with the instruction is extensive, although in many cases the organisations don't borrow any money. But in a significant number of cases state agencies borrow on a short-term basis to deal with funding shortfalls.
The list does not include commercial semi-states, but does include companies like Irish Rail. It also includes the IDA, FAS, An Bord Pleanala and Enterprise Ireland.
The IMF and EU must also be provided with monthly management accounts by the Department of Finance itself, showing how much revenue the State is collecting and how much it is spending.
The whole area of how the public finances are managed is due to change at the end of June when a Budget Advisory Council will come into operation. This will oversee the budget process and make sure the State sticks to its debt targets.