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Sunday 8 December 2019

Government sends mixed signals over second bailout

Michael Brennan Deputy Political Editor

GOVERNMENT ministers sent out mixed messages yesterday about the possibility of a second bailout at the end of next year.

The issue has been at the heart of the fiscal treaty campaign because a Yes vote is required for Ireland to get access to the new €700bn European bailout fund.

Tanaiste Eamon Gilmore yesterday insisted it was still possible to get out of the current bailout programme by the end of 2013 and return to borrowing on the international markets.

"We're on target to exit the programme and therefore not to need the second bailout. The troika have given a very positive outlook on how Ireland is performing in the programme," he said.

He was backed up by Justice Minister Alan Shatter and Children's Minister Frances Fitzgerald, who were canvassing for a Yes vote in the Dundrum Town Centre in Dublin yesterday.

But Junior Minister for European Affairs Lucinda Creighton said it would be "irresponsible" not to plan for the possibility that Ireland could not borrow on the markets.

"It is our intention of course, as we have stated all along, to re-enter the markets towards the end of 2013. But we have to plan for the eventuality that we may not be able to," she told RTE.

As recently as last January, Finance Minister Michael Noonan said talk of a second bailout was "ludicrous".

But he shifted his position last week when he said Ireland might not be able to get back into the markets at the end of 2013 because there was such uncertainty in Europe now.

Mr Gilmore, who yesterday launched a new Labour Yes poster for the fiscal treaty, said it was more likely that a second bailout would be required if there was a No vote.

"In those circumstances, we wouldn't have access to the European Stability Mechanism, so you would have the worst of both worlds," he said.

Mr Gilmore backed up his party colleague, Communications Minister Pat Rabbitte, who was forced to deny claims that he had told business people the Government had no plan to deal with the constantly changing economic crisis.

"In any event, it's not something that he could or would say because the Government has a very clear plan about economic recovery," he said.

Back in 2010, Fianna Fail ministers were savagely criticised for failing to tell the public that the EU-IMF bailout was on the way. But Fianna Fail finance spokesman Michael McGrath denied it was unhelpful for him and party leader Micheal Martin to be now talking about a second bailout.


"We are merely recognising the reality that it is a distinct possibility and many independent commentators are of the same view," he said.

Mr McGrath, who was canvassing on Grafton Street in Dublin yesterday, said the interest rate on the bailout funds was 3.5pc compared with 7.5pc on the markets -- so a Yes vote to give access to the second bailout fund was vital.

Mr Shatter said that having access to the new bailout fund was the difference between "borrowing money from the credit union or going to the loan sharks".

"We want to know that we have in our back pocket the possibility of going to the credit union but we are determined to get back into the markets and regain that piece of our economic independence as soon as we can," he said.

Irish Independent

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