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Friday 22 September 2017

Noonan says it's time for Europe to 'prepare the B plan'

Greek Finance Minister Yanis Varoufakis shakes hands with Michael Noonan ahead of the meeting in Luxembourg yesterday
Greek Finance Minister Yanis Varoufakis shakes hands with Michael Noonan ahead of the meeting in Luxembourg yesterday
Colm Kelpie

Colm Kelpie

Finance Minister Michael Noonan said there'll be no contagion effect in the event of a Greek exit from the Eurozone, as the Government prepares contingency plans for a possible default or withdrawal.

Mr Noonan said European governments had gone as "far as they're going to go" to prevent Greece leaving the single currency, and that the option now was to "prepare the B plan".

On his way into a meeting of Eurozone finance ministers in Luxembourg yesterday, Mr Noonan said the Department of Finance, the National Treasury Management Agency (NTMA) and the Central Bank have been discussing a possible exit at a "high level".

"We don't think there'll be a contagion effect if there was a Greek exit but we've had the conversations at a high level with the NTMA and the Central Bank and we're watching the situation," the minister said.

"We're taking advice from the European Central Bank and Frankfurt and from elsewhere. But it's a European issue rather than an Irish issue."

"There is still time and there is still space for a further discussion and a further set of proposals."

Financial newswire Bloomberg reported yesterday that the Government was making contingency plans in the event of a Greek exit or default, but no specifics were given.

A group of government officials, led by senior Department of Finance official Ann Nolan, is examining all scenarios.

"Officials in the Department of Finance together with representatives of other relevant state agencies make contingency plans for a range of issues," the Department of Finance said.

Earlier German Chancellor Angela Merkel said a deal between Greece and its creditors was still possible if Athens showed the necessary will, amid mounting pessimism that the austerity-hit country might crash out of the Eurozone.

Talks have deadlocked, amid looming debt repayments by Greece and the fear of a potential default.

Ahead of yesterday's meeting, Mr Noonan said he didn't have any "great expectations" of a positive outcome.

He said he believed that the meeting would involve a preliminary discussion that would then feed into a longer discussion at the heads of state and government meeting due to take place next week.

He acknowledged a claim by Greek Finance Minister Yanis Varoufakis that the latter would make an intervention during the meeting, but Mr Noonan didn't appear optimistic that it would yield results.

"I've heard Yanis' proposals before and they tend to be more macro economic in nature rather than specific, and negotiations are about specifics," the minister said.

Mr Noonan said many people are conscious that a "bad deal may be worse than no deal".

Asked how far member states are prepared to go to prevent an exit, Mr Noonan said: "I think they've gone about as far as they're going to go.

"The option is to prepare the B plan."

Irish Independent

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