Tuesday 21 October 2014

Taoiseach insists €10bn 'overdraft' won't cost taxpayers

Michael Brennan Deputy Political Editor

Published 07/09/2013 | 05:00

TAOISEACH Enda Kenny has insisted that taxpayers will not be hit with more harsh demands from the EU, IMF and ECB troika in return for a proposed €10bn 'overdraft'.

The Government is seeking the credit line as a precautionary measure.

It is part of the planning for the country to exit from the current €85bn bailout at the end of this year.

Mr Kenny insisted that it would not lead a repeat of the strict conditions contained in the current bailout agreement with the troika – which have led to taxpayers being hit with a property tax this year and water charges next year.

And he dismissed criticisms from Sinn Fein that the overdraft would amount to a "second bailout".

"They would do that, wouldn't they," he said.

Mr Kenny welcomed the support of head of the eurozone finance ministers Jeroen Dijsselbloem for an overdraft facility next year after the country exited the bailout.

Europe's bailout pot, the European Stability Mechanism, has two smaller pots for cash under these circumstances – the precautionary conditioned credit line and the enhanced conditions credit line.

Countries can apply to Mr Dijsselbloem – who is also the Dutch Finance Minister –for assistance, as he manages the pot on behalf of Europe.

The European Commission then decides whether the country meets the conditions.

TARGETS

Junior Minister for Finance Brian Hayes said this overdraft would not contain the type of specific conditions laid down in the current bailout agreement.

But he said the State would have to stick to its overall targets to bring down its budget deficit – which is currently around €12bn.

"That's already in place. we've already signed up to it, it's called the fiscal treaty. Part of that is that each country had to live within its means and had to reduce its current budget deficit," he said.

The Government has not yet reached agreement with the troika on how large the overdraft will be – but Finance Minister Michael Noonan has said he will be looking for €10bn.

Irish Independent

Read More

Editor's Choice

Also in Irish News