Tuesday 20 March 2018

The ins and outs of OMT

Michael Noonan
Michael Noonan

FINANCE Minister Michael Noonan took a swipe at the great and the good of Ireland's illustrious economic world this week.

He claimed there was a misunderstanding in Ireland, "even at the highest level of economic thinking", about the European Central Bank's government bond-buying programme, Outright Monetary Transactions (OMT).

It appears there's been a whole load of speculation that Ireland may not qualify for OMT now that we've spurned the idea of a precautionary credit line. But that's not right, chided Mr Noonan, who had a lengthy conversation with ECB boss Mario Draghi in a bid to get some clarity on the matter.

And then when he did, he gave off to those economic thinkers who don't have direct access to Mr Draghi for misunderstanding the concept. And who would blame them.

Most things that come out of the ECB are rather hard to get your head around. Plain speaking isn't its strong point.

Mr Noonan, pictured below, said leaving the bailout without a credit line neither rules Ireland in nor out of accessing OMT. But Fiscal Advisory chairman John McHale seems to disagree. "I don't see any confusion around the requirement that you have to be part of a precautionary programme to get access to it... if we had that precautionary programme in place it would seem that we would have had much smoother access to it."

The plot thickens.

Irish Independent

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