Top finance controllers favour bailout exit safety net
THE COUNTRY'S most powerful financial controllers all want Ireland to have access to an emergency credit line from the EU after it exits the bailout, a study has found.
In a survey of leading chief financial officers, every single respondent said the Government should seek a precautionary credit line from the European Stability Mechanism to have in place once Ireland exits its bailout programme on December 15.
The Government confirmed in recent months that such a precautionary credit line had been discussed, but a deal had not yet been reached. The aim of the facility would be to reassure investors and purchasers of Irish government bonds that Ireland could have access to emergency funds if needed, even though it is not intended that the country would ever draw down the funds.
Finance Minister Michael Noonan played down the concept recently, saying that the €25bn stockpiled by the NTMA through the debt markets over the past year was enough of an insurance policy. But the new results show that industry thinks otherwise.
"Most of Ireland's CFOs have spent the last five years really tightly managing their profit and loss accounts, balance sheets and risk assessments," said Deloitte partner Shane Mohan, whose accounting firm prepared the research. "They fully understand the value of having a back-up, a precaution. CFOs by their nature are cautious and prudent people."
Mr Mohan added that the security provided by a credit line would add to people's confidence in their own enterprise.