Thursday 23 November 2017

Troika arrive for bailout review but tensions remain in group

Members of the 'Troika' team - European Commission, ECB and IMF - crossing the street from the Merrion Hotel to the Department of Finance in 2012
Members of the 'Troika' team - European Commission, ECB and IMF - crossing the street from the Merrion Hotel to the Department of Finance in 2012
Donal O'Donovan

Donal O'Donovan

The eighth troika mission to Ireland kicks off today as the IMF and European bailout teams remain at odds over who will shoulder the full cost of the €64bn Irish bank bailout debt.

Officials from the European Central Bank (ECB), the European Commission (EC) and the International Monetary Funds (IMF) are in Dublin for the final review of progress under the bailout programme before December's Budget.

The high cost of running the health system, including the budget over-run at James Reilly's department, has already been flagged as a key concern for the officials.

So too are are the full extent of the Croke Park savings and so-called "universal payments" through the social welfare system such as child benefit and old-age benefits that are the same for all recipients, regardless of their means.


The bailout team is also focused on ways of broadening the tax base, including pressing ahead with property taxes and other measures to spread the cost of running the State across more of the population.

The bailout officials will meet with ministers Brendan Howlin and Michael Noonan and their officials.

Unlike previous troika missions the latest visit comes at a time of growing tension between the Washington-based IMF and Europe's own rescue teams.

Those tensions first emerged at a conference in Tokyo last week, where IMF officials rowed back on their previous arguments that strict austerity is needed even in countries in recession to restore economic well-being.

It remains the dominant European view, however.

In Ireland, differences between the IMF and the ECB are also likely around the question of relief from the €64bn cost of bailing out Irish banks.

In an interview published yesterday, the head of the IMF's European department Reza Moghadam called for further support for Ireland from Europe "in line with euro area leaders' statements on improving the sustainability of the well-performing programme", a reference to the apparent delay in implementing the June 29 agreement to break the link between bank and governments. In the same interview Mr Moghadam said Europe should be doing more to address the crisis.

"The elements of a solution are there, but further implementation is needed at both the country and euro area levels, against a backdrop of weak growth and challenges in sustaining political support across the euro area," he said.

Since the seventh troika review ended in July the Department of Finance has introduced legislation to establish the new personal insolvency regime, a credit union bill aimed at stabilising the sector and laws to establish a new credit risk register to be maintained by the Central Bank, all of which had been on latest the troika wish list.

Irish Independent

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