Voting No will deny us affordable credit, says NTMA
THE agency responsible for funding the State has warned that a No vote will cut off the State from borrowing at an affordable rate.
The National Treasury Management Agency's stark advice is a rejection of the No campaign argument that the €700bn European bailout fund is not required -- because the markets would provide the necessary funding instead.
Finance Minister Michael Noonan briefed the Dail about the NTMA's advice yesterday.
"It considers that a No vote in the referendum on the stability treaty would mean in all likelihood that it would not be possible for Ireland to re-enter the bond markets at sustainable rates," he said.
The State is currently paying an interest rate of 3.46pc on our current EU-IMF bailout loans. But it would have to pay double this if it went to the markets, where the current interest rate is 7pc on 10-year Irish government bonds. The planned new €700bn EU bailout fund is only available to countries who ratify the treaty.
Mr Noonan said it was independent advice from the NTMA -- but that it fully concurred with his own opinion. He said that a No vote would result in the State having "no money" by the end of next year.
"The deputies opposite will then be whingeing, shouting and roaring about cutbacks in health services, education and everywhere else because if we get no money we will have to make the adjustment in one year," he said.
It is the first time the NTMA has been brought into a European referendum campaign.
It is responsible for securing funding for the State when the current bailout deal expires at the end of next year. The State will need to borrow €16bn after that to secure enough funding to keep services going in 2014.
Mr Noonan dismissed Socialist Party TD Joe Higgins's complaints that people were being harassed and bullied into voting Yes by economic agencies.
"The only harassment and bullying I have seen in the past couple of weeks involved supporters of the No campaign harassing and bullying the Taoiseach as he campaigned across the country. They tried to prevent him from explaining the situation to ordinary, decent citizens," he said.
It came after Mr Kenny's car was pelted with eggs during a visit to Milford in Donegal last Monday.