Ireland needs extra support from ECB at bailout exit – Noonan
This week's problems in Portugal have highlighted the need for Ireland to have extra supports in place when our bailout is due to end in December, according to Finance Minister Michael Noonan.
That could mean having the "backstop" of a buyer of last resort lined up to support Irish bond prices – such as the European Central Bank and its outright monetary transactions (OMT) from the start of next year.
"As we have seen in the past, we are susceptible to shocks elsewhere in the eurozone and we must ensure that the proper protection is in place to deal with such shocks.
"Over the last number of months we have opened initial discussions with the troika on the type of supports that may be available post-programme," he claimed.
The Government will also "fully explore" the prospects of using Europe's bailout fund to cover at least part of the cost of recapitalising Bank of Ireland and Allied Irish Banks after it got a deal on "retroactivity" last week, Mr Noonan said.
Speaking at an IBEC event in Dublin, Mr Noonan said his team was now assessing the viability of using the European Stability Mechanism (ESM) to pay for the pillar banks' bailout.
Last week, European ministers said it would assess applications to use the ESM to cover past bailouts on a "case-by-case" basis.
If Ireland applies to use the ESM, it could save at least part of the €25bn it put into the two banks.
"My focus is now turning to the ESM and the possibility of using it to retrospectively recapitalise the Irish banks," said Mr Noonan.
"By this I mean generating a return to the taxpayer from their investment in AIB, Bank of Ireland and Permanent TSB.
"We managed to secure a commitment to examine the possibility of retroactive recapitalisation on a case-by-case basis.
"This opens up opportunities for Ireland that I intend to fully explore and the objective is to move the Irish debt closer to the EU average," he added.