Wednesday 13 December 2017

Kenny will seek bailout rate cut while still in dark on banks

Fionnan Sheahan, Laura Noonan and Sarah Collins

TAOISEACH Enda Kenny will have to seek a reduction in the bailout interest rate next week without knowing the size of the black hole in the banks.

Finance Minister Michael Noonan's meeting with IMF and EU chiefs was overshadowed by the stress tests being conducted into the banks.

The stress tests will be completed at the end of this month.

Government sources admitting the vacuum of hard information does not suit the coalition's efforts heading into the vital EU summit next week.

"It's not ideal and nobody regards the sequencing as ideal. We didn't determine the timeframe," a source said.

The meetings between the bailout partners and the new coalition was described as more like "presentation and getting to know each other" than talks.

"There is a lot of technical work going on at lower levels, but nothing concrete yet," said one source, when asked about the progress on new solutions to the crisis.

These solutions include Mr Noonan's desire for a "longer-term" solution to the banks' cash-flow crisis.

Mr Noonan raised the issue with European Central Bank President Jean-Claude Trichet on the sidelines of talks in Brussels this week.

It is believed he also discussed it with ECB board member Jurgen Stark who was in Dublin on the same day as the IMF team.

No further high-level meetings are pencilled in, as both sides await the results of the stress tests.

The delegation from the IMF, EU and ECB left Dublin on Wednesday night after meeting Mr Noonan and fellow finance minister Brendan Howlin.

But the entire team will be back next month for the quarterly review of Ireland's economic performance and adherence to the rules set down for the bailout.

The Government will seek changes to the deal at that stage, including the reversal of the cut in the minimum wage.

Meanwhile, Agriculture Minister Simon Coveney was talking tough on tax in the run-up to a meeting with his French counterpart. Mr Coveney will meet French farm minister Bruno Le Maire in Paris today, and says Ireland will refuse to be "bullied into submission" on the 12.5pc corporation tax rate.

Irish Independent

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