Friday 15 December 2017

Bailout exit talks delayed by German poll, Noonan admits

Pat Gunne, Green Reit Plc (left) with Minister for Finance, Michael Noonan TD, John Moran, Department of Finance and Stephen Vernon, Green Reit Plc, pictured at the Green Reit Plc launch held in the Irish Stock Exchange, Dublin.
Pat Gunne, Green Reit Plc (left) with Minister for Finance, Michael Noonan TD, John Moran, Department of Finance and Stephen Vernon, Green Reit Plc, pictured at the Green Reit Plc launch held in the Irish Stock Exchange, Dublin.
German Chancellor Angela Merkel
Peter Flanagan

Peter Flanagan

THE Government has admitted for the first time that the timing of the German elections has forced Finance Minister Michael Noonan to delay talks with the troika on the best bailout mechanism.

Speaking in Dublin, Mr Noonan said that the Government is "progressing well" in its plan to exit the bailout but the formal talks with the troika will not begin until after German elections on September 22.

"The briefing I am getting back from officials is that everything is going well.

"There have been discussions on exit strategies but we won't conclude those conversations until the autumn, particularly after the German elections," he said.

It has been widely presumed that the final plan will be delayed to give German chancellor Angela Merkel  political cover as she seeks re-election, but this is the first time Mr Noonan has explicitly acknowledged the timing would be affected by that poll.

The minister added that the Government would be seeking a backstop or credit line that could be accessed in emergency by the state, but he did not expect to have to access it.

Confirmation that the talks will be delayed until after the German federal elections will be seen as further evidence of the power Europe's most populous nation now has over the rest of the EU, and moves Europe closer to the US political system which effectively shuts down ahead of presidential elections there.

Ireland's strategy for exiting the bailout is not the only item that has been apparently held up by the German political calendar.

The long awaited European bailout fund, the ESM, is not expected to be set up until after the election as well, for fear of Mrs Merkel and the rest of the German government being seen to be paying the debts of profligate countries in the periphery.

Mr Noonan was speaking at the launch of Green Properties' real estate investment trust (REIT), which took place at the Irish Stock Exchange.

"A functioning and sustainable development and construction sector is a feature of every modern economy and is a key driver of jobs and growth across the country," he said.

"REITs are the latest initiative and they are a globally recognised structure to attract investment – REITs exist in 35 countries world-wide and in 13 countries in Europe and allow investors to finance rental property investments in a risk diversified manner," he added.

Green REIT as the new company is known, will list on the stock exchange today.

The stock exchange's Aileen O'Donoghue welcomed the listing, adding the ISE had long supported the introduction of REITs in Ireland.

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