Sunday 21 January 2018

Colm Kelpie: We'll remain under the watchful eye of troika despite exit

Dutch Finance Minister and Eurogroup chairman Jeroen Dijsselbloem
Dutch Finance Minister and Eurogroup chairman Jeroen Dijsselbloem
Colm Kelpie

Colm Kelpie

IRELAND will be still be subject to "intensive surveillance" twice a year from the troika even though we're leaving the bailout without a credit line in place.

The Dutch finance minister and head of the group of eurozone finance ministers said we would move forward "in relative independence" out of the crisis.

With Spain also leaving its bailout credit line, Jeroen Dijsselbloem said such countries exiting bailouts would be subject to extra scrutiny under new eurozone rules.

"It's not measures. It's surveillance, which will take place twice a year. It's extra, intensive surveillance during a period of time," he said, adding the details had yet to be thrashed out.

Mr Dijsselbloem (right) said the surveillance would go into "specific risks and reforms" that had to take place.

Klaus Regling, head of the bailout pot known as the European Stability Mechanism, also said it would still have a role in Ireland – as it had to monitor the State's ability to repay the bailout money.

European Economics Commissioner Olli Rehn said the surveillance would include regular reviews, twice a year in conjunction with the IMF.

Mr Rehn said Ireland had made impressive progress and claimed the "graduation" from the bailout would send a strong signal to the markets.

"I want to congratulate both the Irish and Spanish people. Ireland's decision to exit the programme without a precautionary credit facility is very important. I know the Irish Government reflected very carefully on this matter," he said.

IMF managing director Christine Lagarde said Ireland had built up a strong position in terms of its bond yields and cash buffer.

Earlier Mr Noonan hailed the decision to go it alone without a precautionary credit line, saying it restored economic and financial freedom.

He said there was now an opportunity to exit the bailout cleanly with a low level of risk.

"I would remind the people at home that we spent an awful lot of time getting our freedom and getting the authority to run our own affairs and there's not much point in having political freedom if you don't have economic and financial freedom," Mr Noonan said.

"This restores economic and financial freedom in Ireland.

"Our fullest intention is to build an economy that's based on a sustainability model rather than a boom-and-bust model. Get our people back to work and get our young emigrants back into the country and provide jobs at home."

Mr Noonan said Ireland had built up more than €20bn in cash reserves and even if we had a credit line, we would not have to use the facility next year.

He said funding needs were between €6bn and €10bn next year.

He said the intention was to go back into the markets in the early part of 2014.

The minister said he had never asked for a precautionary programme when weighing up the options but simply took advice from treasuries across the eurozone.

And he said that when the history books are written, the troika will be seen as being very helpful to Ireland.

Meanwhile, as the State faces a new round of stress tests on the banks late next year, Mr Noonan said that as the months go on there was less likelihood of a need for new capital to be injected into the banks.

Irish Independent

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