Sunday 19 January 2020

IMF rejects bailout claim if voters snub treaty

Laura Noonan and Michael Brennan

The International Monetary Fund last night moved to dismiss claims that it would provide a bailout for Ireland if voters rejected the fiscal treaty.

Its bailout rejection came as Finance Minister Michael Noonan revealed that the IMF was "crystal clear" that it would not provide "unilateral assistance" to eurozone countries.

The state will need funding when the current bailout deal expires at the end of next year -- but access to the new €800bn European bailout fund will only be given to countries who sign up to the fiscal treaty. This has been the key argument of the Yes campaign -- but a newspaper reported yesterday that the IMF could provide bailout funding even if voters rejected the treaty.

In a statement, the IMF said the 'Sunday Times' "misinterprets remarks from an IMF spokesman which were a factual statement about fund lending procedures in general and not about Ireland or any country specifically".

And the Government reacted quickly to what threatened to undermine its main selling point for the fiscal treaty -- that it was an "insurance policy" which will give Ireland access to the €800bn European Stability Mechanism (ESM) bailout fund.

Mr Noonan said the IMF was only willing to partake in bailouts "if Europe takes the lead".

"The ESM will be the only source of bailout funds when the Irish programme ends," he said.

UCD economics professor Karl Whelan last night said that Ireland could be able to access bailout funds from the IMF -- but on a much smaller scale.

"We are already well beyond the (borrowing) level that the IMF are comfortable with in terms of the size of the Irish deal," he said.

The IMF currently supplies about a third of the €67.5bn bailout funding for Ireland. It has 'preferential' status on getting its money, but would lose this in an IMF-only bailout -- and therefore would be unlikely to lend as much money. The debate came as a 'Sunday Business Post'/RedC opinion poll showed that 47pc of people are going to vote Yes, 35pc will vote No and 18pc are undecided.

Fianna Fail leader Micheal Martin said yesterday that a No vote would lead to a "riskier scenario".

"A Yes vote will give us a bit more security in terms of access to money and funds," he said.

But Sinn Fein deputy leader Mary Lou McDonald said: "There is no way that we will be allowed to go under within the eurozone. To do that would be to jeopardise the euro and protection of the currency is the primary goal of the EU leaders."

Irish Independent

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