Sunday 18 February 2018

Kenny gives bailout 'overdraft' hint

Fionnan Sheahan and Lise Hand

TAOISEACH Enda Kenny has indicated again that the Government intends to make a clean exit from the bailout with an overdraft facility.

Mr Kenny hinted that the post-bailout strategy will be to use the new €500bn EU rescue fund as a backstop.

The Government is edging away from taking up an emergency loan option as it is worried about what EU countries would demand in return.

The low corporation tax rate could be dragged into the debate, even though there were no grounds for making it a condition for approval of an emergency loan.

Finance Minister Michael Noonan is fighting what he regards as unacceptable conditions attached to a back-up loan.

The Coalition is concerned the conditions attached to a credit line could allow the opposition to claim the country was still in a bailout.

Speaking at the Fine Gael presidential dinner, Mr Kenny mentioned the European Stability Mechanism (ESM) coming into effect.

He pointed to the passing of the EU fiscal treaty providing this safety net, saying: "We asked the people some time ago, in the middle of all of this fiscal disciplinary measures that needed to be taken, to vote on the fiscal stability treaty.

"And they did, 60-40 in favour of it – a clear signal of us being aligned with the euro and our future lined up with the eurozone.

"And what that actually means is that in whatever way we exit this programme, whatever decision our Government makes in the best interests of the people, when we exit that programme we are entitled as a member of the eurozone to the security of the €500bn fund that was created with the ESM and that security is available to all other eurozone countries as well, but it entitles us to have as that backstop, a security that lies ahead of us when we exit the programme on December 15."

Mr Noonan will discuss the bailout exit options with eurogroup chair and Dutch finance minister Jeroen Dijsselbloem in The Hague tomorrow.

Mr Noonan is insisting the Government will not accept any further condition over and above what is already contained in EU budget rules.

Irish Independent

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