Saturday, 27 October 2012

State wont need a second bailout - Kenny

IRELAND will not need a second bailout when the current EU-IMF programme ends next year, the Government insists.

Taoiseach Enda Kenny and Tanaiste Eamon Gilmore both said Ireland would not need another bailout after a German MP from Angela Merkel's party raised the possibility.

It comes as the Government continues to try and get a deal on our €64bn bank debt and after the joint statement from Mr Kenny and Ms Merkel last weekend.

She accepted that Ireland was a "special case" -- after previously appearing to rule out a write down of its banking debt.

But Norbert Barthle, leader of the Christian Democratic Union group on the Bundestag budgetary affairs committee, said new conditions would apply if the European Stability Mechanism (ESM) was used to reduce our bank debt.


Ireland's bailout came from a previous fund, which has since been replaced by the ESM. But Mr Barthle said a deal on bank debt using the new ESM could mean a second bailout.
"I think it would be necessary to ask for a new programme, with new conditionality directed into the future," he said.

It is another headache for the Government, which is planning to get out of the bailout deal by the end of next year.

Its aim is to "restore economic sovereignty" -- which is not possible as long as the bailout providers are imposing conditions on spending decisions and tax policy.

However, Mr Barthle did make positive remarks about Ireland's current position.
"It is important for me to say that we are very happy about the way Ireland goes, Ireland is on the track, we have great confidence in Ireland," he said.

Mr Kenny was quick to quash the suggestion, saying that he would not use a "term" like second bailout.
"I wouldn't envisage a second bailout programme," he said. Mr Kenny said that discussions on bank debt would take place between eurozone finance ministers.

"This is not a sort of troika bailout situation that applies now. Ireland's banks have been recapitalised at the highest level, that is a matter of historical record, and that burden has been put on our public and on our taxpayers," he said.

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