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Tuesday 22 October 2019

No second bailout for Ireland – Noonan declares

Thomas Molloy and reporters

Finance Minister Michael Noonan today categorically ruled out another bailout for Ireland and said that we would go back to the bond markets in a tentative way in 2012.

Speaking to a group of Chartered Accountants in Limerick, Mr Noonan said we are currently on target and meeting our commitments under the EU/IMF bailout programme which has been negotiated until 2015.

Transport Minister Leo Varadkar sparked alarm and confusion when he said the Government may need to get new loans from the European Union and IMF next year.

Mr Noonan said that the targets under that programme are examined every quarter, and Ireland has been given a clean bill of health. If we continue to meet those targets he said we will grow out of our present difficulties.

He said that the Government may go back to the money markets 'in a tentative way' in 2012, depending on our progress under the programme this year, but it will be on advice from the National Management Treasury Agency.

He said there was a crisis in Greece, but that he did not believe that would affect Ireland’s position. He also reiterated his stand on Ireland's Corporation tax, he said the 12pc rate is sacrosanct, and he has told the French Finance Minister there will be no negotiation on this.

Mr Varadkar was also left backpedalling after he was reported as saying: "I think it's very unlikely we'll be able to go back (to borrowing on the bond markets) next year. I think it might take a bit longer... 2013 might be possible but who knows?

"It would mean a second programme (of loans from the EU/IMF). Either an extension of the existing programme or a second programme. I think that would generally be most people's view."

Another bailout would involve even deeper spending cuts and more increases in taxation - leading to further contraction in the economy. That would mean hopes of a return to growth and possible erosion of the unemployment queues would be dashed.

However, Mr Varadkar will not be reprimanded, senior government sources stressed, despite breaking ranks on the sensitive economic issue.

Other ministers have previously said the country's debts will be unsustainable unless the interest rate charged by the EU is reduced. But no minister has gone so far in saying it is "very unlikely" that the country will be unable to resume borrowing next year.

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