Kenny in last-ditch bid to get a deal on our debt
TAOISEACH Enda Kenny will make a fresh push for a deal on our crippling bank debt as Ireland exits the bailout.
While the country has successfully completed the bailout programme, the level of debt that Ireland is shouldering is regarded as the largest threat to a full economic recovery.
Whether Ireland can reduce its debt – which is expected to peak at 124pc of gross domestic product this year – is regarded as a key factor influencing the view of investors and credit ratings agencies on the country.
The Government doesn't want Ireland to be excluded from any new deals just because the country has successfully exited the bailout.
It is now exploring new options for a debt deal, other than a straightforward sale of the stake in the banks to the new EU bailout fund.
“The reality is you always keep an eye on what is happening elsewhere. But the serious negotiations always only take place closer to the date,” a source said.
The Coalition is eyeing up developments in Greece and Portugal, where debt deals may have to be made next year, with a view to piggybacking on these arrangements.
The prospect of Greece getting a writedown on its debt as it enters its third bailout programme is already being speculated upon. Portugal may benefit from changes to its debt repayments.
And in the wake of the Bank of Ireland's first repayment of its bailout injection, the Government is still looking at the possibility of a sale to the international markets as a means to get back some of the money that was injected into AIB, PTSB and EBS.
The wisdom of selling the stake in these banks for a low price is being questioned.
“Are we better off holding on? Timing matters. Everyone would have been more than delighted to get rid of all of this at whatever price.
“That is a more open question now. We are in a healthier position now. It's not the only option available.
“As the Irish economy recovers, normal banking begins again and those banks will be worth something,” said a source.
The eyes of the international markets and EU leaders will be on Ireland next week, as the Government formally marks the end of the IMF-EU programme. It will stage a special event next Friday to mark the upcoming bailout exit on Sunday, December 15.
Mr Kenny will use the spotlight on Ireland next week to emphasise the positive aspects of the economic recovery to an international audience and encourage investment.
But the coalition leaders are also expected to reiterate the need for a promised EU deal on bank debt.
“Our recovery is fragile. It's not guaranteed and it's not something that can be taken for granted. We will be making that point.
“Europe is happy to have a success story. We have to make sure we don't let that go by the wayside,” a senior government source said. The Taoiseach will travel to an EU summit the following week, where Ireland's successful exit from the bailout is expected to be held up as an example.