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FINANCE Minister Michael Noonan is facing Labour demands to pass on the benefits from the Anglo debt deal to taxpayers in the next Budget.
Mr Noonan has pledged that the €1bn in savings on interest payments on the Anglo debt will go towards reducing the scale of tax increases and spending cuts. But negotiations with the troika will have to take place to get permission to reduce the €3.1bn cutbacks target in Budget 2014 and the €2bn cutbacks target in Budget 2015.
Labour backbenchers are anxious that Mr Noonan secures this agreement because it has the potential to reduce the impact of spending cuts in health, education and social welfare. But they do not expect any changes to the property tax, which is due to bring in €250m this year and €500m next year.
As negotiations continue on getting a reduction on the rest of Ireland's legacy bank debt, Taoiseach Enda Kenny said its case has not been weakened by the Anglo deal. He said European leaders wanted "a success story" of a country getting out of a bailout.
"And Ireland can be that country," he said.
Bailout
The Taoiseach said he didn't see any agreement on the potential use of the new bailout fund to ease Ireland's bank debt until the end of 2013.
He said the issue of the Government accessing new EU bailout funding for backdated recapitalisation of the banks – such as AIB and Bank of Ireland – was different to the Anglo promissory note.
Labour Dublin North Central TD Sean Kenny said that taxpayers were entitled to relief as a result of the Anglo deal.
"Hopefully the expenditure cuts won't be as severe and the pain will be lighter," he said.
And fellow Labour TD Michael Conaghan said the deal had "given a kind of psychological freedom".
"The fate of the country isn't staying at the bottom of the ladder. We are climbing the rungs again," he said.
The long-awaited deal stretches the cost of bailing out the toxic bank for up to 40 years instead of 10, with the final repayment not due until 2053.
It will mean that the State will have to borrow €20bn less over the next 10 years.
Though the deal has given the Coalition a huge boost, ratings agency Fitch has said that it would not lead to any improvement in Ireland's credit rating.
Tanaiste Eamon Gilmore said that the positive reaction of the markets had been "a great boost of confidence".But the Irish Congress of Trade Unions is going ahead with protests today calling on the EU to "lift the burden" of the €63bn banking debt.
Comment
Irish Independent
