The Fianna Fáil Finance Spokesperson Michael McGrath has called on the Government to clarify the mixed signals it is sending on the importance of a deal on banking debt to securing Ireland’s full exit from the current troika programme of assistance.
Deputy McGrath stated, “At yesterday’s press conference, Ministers Noonan and Howlin were at pains to emphasise that Ireland would exit the existing troika programme next year ‘in all circumstances’. However, speaking on RTE’s Six One news yesterday evening, Minister Noonan indicated that Ireland’s exit from the programme would not be sustainable in the absence of a deal on bank debt when he said:
‘…if we don’t get a deal on the bank debt, we’d still be able to access the market but it my view at interest rates that would be too high to fund the €10 bn or so deficit between what we collect in taxes and what we spend once we get the deficit to below 3%…..’
“The difficulty is that the government can’t seem to make up its mind on how important a deal on bank debt is or what exactly we are looking for. Minister Noonan has now caused confusion as to the government’s view on whether Ireland can fund itself independent of the troika in the absence of a deal on bank debt. His comments also come in the wake of statements from Minister of State Brian Hayes and Minister Ruairí Quinn that Ireland’s debt level is unsustainable – statements which contradict the official Department of Finance position.
“Meanwhile, the government should clarify whether it agrees with the comments from the spokesperson from Chancellor Merkel’s CDU party this morning that using the ESM to alleviate Ireland’s legacy bank debt would necessitate a second troika programme with new conditionality. The government has not acknowledged this before. The obvious question needs to be answered is whether such conditionality would relate to the financial or banking sector only or whether it would be much broader in scope and similar to the existing programme?”