Saturday 16 December 2017

Bailout 'a strait jacket' for next coalition

ine Kerr Political Correspondent

THE parties likely to form the next government last night claimed the multi-billion bailout deal has "tied their hands".

Documents published by the Department of Finance contained "specific plans" for 2011, 2012, 2013 and 2014.

These will put the next Government in a "straitjacket", Fine Gael and Labour claimed.

The strict terms and conditions of the €85bn bailout require quarterly, monthly and sometimes weekly updates.

The memorandum and letters of intent, which will be submitted to the IMF, European Commission and ECB, last night revealed the intense scrutiny the Government will come under.

The documents also contained extensive details on the budget requirements, cutbacks and policies until 2014 -- down to making provision for increases in a property tax year-on-year.

Labour's Pat Rabbitte last night claimed that key decisions had already been made for the new Government.

The next coalition, he said, was a "prisoner of this bankrupt document".

Fine Gael's Brian Hayes claimed the entire bailout affair was now "Ireland's economic Iraq" and an exit strategy must be found.

The documents outlined the need for cutbacks of €6bn in 2011, €3.6bn in 2012, and another €3.1bn in 2013. Water charges would be introduced earlier than expected in 2012 or 2013, according to the documents.

Mr Rabbitte said any new government would be in a "straitjacket" for the first three years of office because the deal amounted to a "hospital pass" from the current Government.


The party's finance spokeswoman Joan Burton said she had received legal advice that a constitutional referendum may be required to introduce the binding multi-annual spending ceilings outlined in the documents. But Fine Gael's finance spokesman Michael Noonan conceded the documents become less specific after 2011 -- leaving an incoming government free to introduce its own policies. But he stressed he needed more time to assess the documents.

Finance Minister Brian Lenihan told the opposition he did not accept that the freedom of the next government would be "any greater or lesser" because of the bailout deal.

During last night's Dail debate on the bailout, Mr Lenihan said he had been advised by the Attorney General that the four-year National Recovery Programme was not an international agreement and did not require the approval of the Dail.

Ultimately, the Government had to seek external assistance because the problems in our banking system simply became "too big for this State to handle on its own", the minister said.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News