THE government is preparing to row back on plans to raise €800m by selling the harvesting rights to Coillte’s forests for 80 years.
A number of senior government sources said Brendan Howlin, the public expenditure minister, would “find enough barriers” to the sale to ensure it could not go ahead.
“There’s huge opposition to it, from TDs and from the general public,” said one source close to Howlin. “It won’t be confirmed publicly for a while, but the intention is not to go ahead with the sale.”
In recent weeks, a number of government TDs have made speeches in the Dail or tabled parliamentary questions opposing the sale of Coillte. Among them are Emmet Stagg, the Labour chief whip, and Fine Gael TDs Andrew Doyle, Joe McHugh, Terence Flanagan and Billy Timmins.
The Labour party is in the midst of an internal storm. A storm the leadership is trying to control. We are not used to such events in the Labour party, associating them more with their partner FG and even more with the heyday of FF. However, heaves are not easy to organise or execute, just ask Richard Bruton and Leo Varadkar. It’s a game that requires huge political tact.
So the first thing to ask is why are Labour in this position? That’s simple, firstly they over promised at the election, the buck for that stops with the leader. Secondly, the perception is that Labour are being rolled over by FG. Eamon Gilmore has done himself no favours by being so determined to always show a united front with End Kenny. Distance and the odd falling out can destabilise governments but it is much better for your leadership.
The next question to ask is how serious are the rumours of a possible heave? They are pretty serious. I said at the start of the year that Eamon Gilmore was in a spot of bother and things have got worse since that. Labour are losing far too many personnel. The grassroots are feeling sidelined and angry. Now, we all know that in the normal course of events party grassroots don’t make the big decisions, however, once they start to get agitated they have enormous power as TDs feel the pressure and start to listen to people they are close to on the ground about the implications for their seat. All of those who have walked out of Labour parliamentary party are gone unless the leader changes. The only way to heal a rift is to move on from it and to do that, a leader must be changed. This is even true when a heave occurs. An FF leader never lost a heave vote. It’s what happed after that caused problems. Equally I have always maintained had Richard Bruton and Leo Varadkar and others not agreed to return to the FG front bench and held their nerve, Enda Kenny would not be Taoiseach today.
Labour are starting to realise that the only way they can convince people they are going to change and get tougher is if they start with a new face and perhaps also remove some others at cabinet. Pat Rabbitte and Brendan Howlin will be most certainly in the firing line.
Now, back up the horse, because all is not lost for Eamon Gilmore. He is rumoured to be talking to TDs. That’s a wise move, he needs to know what he’s dealing with then he needs a strategy. The first stage of this would be to try calm fears, and avoid an all out vote against him. Heaves are useless and get no where unless one of your front bench moves to support it. Gilmore can rest assured that he has strong support from his ‘old boys’ he has one weak link, Joan Burton. He needs to stop Joan making any attempts in the short term and just buy some time.
Joan has her own issues. She knows there are limits to what Labour can achieve. If she were to take over then she would certainly be expected to take a tougher line with FG and be far less chummy with them. That’s fine, she also knows that FG are desperate to remain in power and avoid an election so she could get a few big wins on that basis, but it would require brinkmanship and that will weaken the government. In reality such a strategy may start to halt the Labour decline, even gain them a few points but it wont be huge (a few points could be at least 10 seats saved though). However it’s unlikely the government would last full term, she would be looking at an election in 12 -18 months. Timing would be everything. She may well prefer if Gilmore could remain for another year and she could face such a strategy and timescale from next year. However, the opportunity may be presenting itself in the coming months. Timing is everything in such a strategy. This helps Gilmore as he may be able to keep Joan onside for the next while.
That’s valuable breathing space but then he needs to figure out how to use it. He needs to talk to Enda. The chummy façade needs to stop. FG need to realise that they are better off with Gilmore than whomever might replace him, therefore they need to find an issue that they can publicly disagree on, let it carry on, argue, and then allow Eamon a decisive victory that will shore up his support. It may hurt FG but its better than the alternative and if FG are really smart then they can surely find an issue that they know they can afford to lose on but matters to Labour.
That would allow Eamon Gilmore escape from his current predicament, but he’s on the ropes right now and there are a lot of ‘Ifs’ in that strategy. Those in Labour hoping for change need to be far more organised and need to know who they support. No matter how you look at it, Eamon Gilmore is now only Leader at the behest of Joan Burton, she can decide to loyally follow him until its too late (a bit like Micheál Martin did with Cowen) or she can ensure he is removed now and give Labour a fighting chance of showing a new image. The question is does she want the job? Such heaves require a certain steel, an ability to stand by what you do and accept the repercussions, they can even end your career. It needs enormous conviction. All sides will be tested in the months ahead
Howlin to public sector workers: If you swallow hard and vote yes, we’ll not be coming back for more
Would you trust this man to deliver?
The deal, if passed, will come into effect from July and run until 2016.
“If you consider this (and) swallow hard – I know it’s not easy – and vote for this, we’ll not be coming back again and we can plan our recovery over the next three years,” he said.
He added that “hopefully the next time we sit down to discuss pay and conditions with public servants, it will be on the basis of a recovered economy and we can talk about improvements in pay and conditions. That’s our objective.”
Trade unions and the Government will today begin considering the new agreement, when they receive the finalised copy of the draft deal from the LRC.
The controversial agreement will see pay cuts of 10% for those earning more than €185,000 and 5.5% for those earning more than €65,000 a year, as well as longer working hours and lower overtime payments.
What are they hiding?
Although An Taoiseach committed to reforming the Freedom of Information legislation by the end of 2012, and although that is another timed-commitment missed – like the Seanad referendum – commitment, it seems that in 2013, there will at least be a new Bill, though it’s by no means certain that the new legislation will extend as far as NAMA.
Yesterday, the Minister for Public Expenditure and Reform, Brendan Howlin appeared before the Oireachtas Finance, Public Expenditure and Reform committee and discussed the extension of Freedom of Information legislation to several new organizations including An Garda Siochana and the Department of Defence. Of primary interest on here is NAMA, but it remains uncertain if NAMA will be included in the new Bill, and if so, to what extent its activities will open to scrutiny.
Minister Howlin stressed that NAMA’s commercial remit may make some requests unacceptable.
This concern is really a diversion on the Minister’s part, because there are existing exclusions under our FoI legislation to protect the necessary commercial sensitivity of transactions undertaken on our behalf by the State. The assessment on here, over the past three years, is NAMA is intrinsically opposed to transparency. We saw this with the extraordinary resistance to the determination by the Information Commissioner Emily O’Reilly that NAMA be subject to environment requests – that resistance is still being played out in the High Court.
The resistance is understandable. NAMA is a new Agency with colossal power and money, and is under constant pressure from those wishing to take a bite out of that power and money. NAMA is not excessively resourced compared to its competitors and dealing with FoI requests can take considerable time. And NAMA will not want mistakes, which it like any large organization will inevitably commit at some point, brought to light where they can undermine the morale and effectiveness of the Agency.
When are we likely to see the new Freedom of Information legislation? The changes will be published in the forthcoming session, says Minister Howlin, which means by the end of March 2013. Will NAMA definitely be included? Not “definitely”, although Minister Howlin was emphatic on “Tonight with Vincent Browne” on 10th October 2011 when he said “we will introduce FOI to NAMA”. Will Freedom of Information which excludes requests which might be deemed commercially sensitive, be of any use? Oh yes indeed, I for one would like to see the independent valuation report which NAMA claims it had before selling a property in Lucan to Enda Farrell, okay, the figures might be redacted but it would put to bed once and for all the doubt over whether NAMA did get an independent valuation.
[Juno McEnroe in the Irish Examiner today has a detailed report on yesterday’s Oireachtas committee proceedings, the transcript of which won’t be available for a few days]
via NAMA Wine Lake.
via NAMA Wine Lake.
Even though there are another three years to go to an election, the goose is already cooked for many Labour TDs. By Vincent Browne.
Michael McGrath, the Fianna Fáil spokesman on finance, responding to the budget on 5 December, said: “Fine Gael [in the cabinet discussions] showed that its absolute priority in the budget is to protect those who have most. We are told the Labour Party made valiant efforts to protect households dependent on social protection but, clearly, it has failed.”
Interestingly, at this point, Ruairi Quinn intervened to say: “Not so.”
Even those of us who might be sceptical about Quinn’s denials of having earlier signalled to a parliamentary Labour Party meeting that he had no confidence in Minister for Health James Reilly might be disposed to accept his word on this – ie, that Labour did not make valiant efforts to protect households depending on social protection.
McGrath went on to say: “The price Fine Gael wanted to extract for considering even a modest increase in tax for those earning more than €100,000 was to cut the most basic welfare payments. Fine Gael used the basic welfare payment of €188 per week as a negotiating chip to protect those earning more than €100,000 per year…
“In the face of this resistance from Fine Gael, the Labour Party capitulated and accepted the symbolic fig leaf of a so-called mansion tax that will affect a small number of people and bring in little additional revenue. Principles that are articulated in opposition are forgotten around the table of power.”
It is incomprehensible that the Labour Party would have agreed to break its solemn and much-advertised election promise not to allow any cut in child benefit, let alone this cut – €10 a month for the first and second child, €18 for the third child and €30 for the fourth and other children – and to do so in a way that will cause further terrible hardship to those whom Labour purports to protect.
I suspect this budget debacle was engineered in the first instance by the attempt to stop the flood of cabinet leaks that marked the lead-up to the 2012 budget a year ago, by confining the deliberations to the four ministers on the economic committee: Enda Kenny, Eamon Gilmore, Michael Noonan and Brendan Howlin.
As Kenny and Gilmore are otherwise largely preoccupied, this left just Noonan and Howlin, both practised political disasters.
Noonan almost did in the Fine Gael party a decade ago, while Howlin – admittedly ably assisted by Alan Shatter – managed to lose the referendum on Oireachtas inquiries.
By the time other ministers became involved in the overall schema of the budget, I suspect it was too late to unpick the big decisions – particularly the decisions on PRSI, the household tax, respite care and child benefit – to protect the wealthy from increased charges or taxes. But perhaps this is a naive, benign assumption, and it certainly does not disguise the instinctual response of Fine Gael to the crisis: to afflict the afflicted and cosset the cosseted. Nor does it disguise the instinctual reflex of Labour ministers to remain in office almost at all costs, probably believing that this is somehow in the national interest.
An exacerbation of all this has been the disingenuous Labour claim that the budget involved a €500 million “wealth tax package”, whereas the true figure is €114 million in 2013 and €174 million in a full year, as Michael Taft of Unite has shown. The situation was made even worse by Gilmore and Joan Burton telling us how difficult all these decisions have been – for them.
Róisín Shortall again made a telling point at Gilmore in her contribution to the Dáil debate on the budget. She noted how the tax relief on pensions costs the exchequer €2.5 billion annually, and around 80% of this relief goes to the top 20% of income earners.
Pointedly, she asked: “On what basis does the Tánaiste believe it is any way fair that a person should be able to receive a lump sum of €200,000 tax-free? What is the basis for continuing with a regime, given that many thousands of taxpayers and others, who cannot afford to make pension provision for themselves, are in effect paying for the significant tax-free pension lump-sums of some of the wealthiest people in the country?”
It is all very dismal for Labour – made all the more so by Mario Draghi, who made it clear on 6 December that it is very much Frankfurt’s way, not Labour’s way, as far the €30 billion Anglo promissory notes are concerned. Even though there are another three years to go to an election, the goose is already cooked for many Labour TDs.
But there is a modicum of hope.
Tom O’Connor, the political scientist, has shown evidence that a left-leaning majority might be emerging (including Labour among the left). He notes that, in 1987, the left was at 15%, in 1997 at 24%, in 2007 at 25%, in 2011 at 40% and, according to the Red C poll in the Sunday Business Post on 2 December, at 43% now.
It is not entirely improbable that the left (Labour, Sinn Féin, United Left Alliance and left-leaning independents) will be close to 50%.
That might be interesting – or it might, once again, be more of the same.
Image top (the Labour Parliamentary Party at the beginning of the 31st Dáil, in March 2011): The Labour Party.
In this clip from the news network Russia Today, the American economist Max Keiser (sound familiar?) lambasts Michael Noonan calling him a “social misfit” and saying that he should be removed from office immediately. Would you agree?
The clip was actually recorded back in November, but Max’s feelings towards the Minister for Finance are surely being felt by the rest of country, especially since last week’s Budget.
Now, while you might not agree with everything Max has to say, he certainly raises some good points. Make sure to have a listen if you’re heading home on the bus and let us know what you think of what Max has to say.
Budget 2013: Property and NAMA
December 5, 2012 by namawinelake
This afternoon in the Dail, the finance and public expenditure and reform ministers, Michael Noonan and Brendan Howlin presented Budget 2013. All the associated documents are here. These are the tax measures. These are the cuts to services and welfare. Overall, the Government presented a positive assessment of the economy overall and confirmed that it expects to beat the deficit target for 2012 with an actual of 8.2% versus the target of 8.6% in the Memorandum of Understanding with the programme finance Troika. So, what about the NAMA and property aspects of the Budget 2013 announcements?
(1) NAMA is to ramp up its provision of residential property for social housing in 2013. This is grossly unfair on NAMA which has already made 3,800 homes available to Government which has only overseen the acquisition of 133 homes to date, including 58 in 2011. So much for environment minister, Phil Hogan’s fanfare last December 2011, indicating that NAMA would provide 2,000 homes in the short term.
(2) NAMA has spent €650m of the €2bn investment announced in May 2012.
(3) The property tax will come into effect from 1st July 2013. Residential property will be self-assessed by homeowners and the tax will be collected by the Revenue Commissioners. The tax is payable by owners rather than occupiers unless they’re both the same of course.
(4) So far, claims the Government – opponents have different figures – 66% of households have paid the €100 household charge in 2012 which was supposed to have been paid by 31st March 2012. From 1st July 2013, the Revenue Commissioners will collect arrears on this charge, and from 1st�July 2013, the arrears will rise from €100 to €200.
(5) The property charge will be 0.18% on homes worth less than €1m and will be 0.25% on homes worth more than €1m, but only on the element in excess of €1m. If a home is worth less than €100,000 then the assessed value will be €50,000. Above €100,000 there are bands of €50,000 and the assessed value will be the midpoint of the band, eg your home is worth €130,000 then the assessed value will be €125,000, if your home is worth €205,000 then the assessed value will be €225,000.
(6) In 2013 only, only 50% of the annual charge will be payable.
(7) There will be exemptions for three years for first time buyers in 2013, and buyers of homes which were previously vacant and unlived in.
(8) There will be no waivers, only deferrals so if you can’t pay, the charge will be added to a tab� which will be payable when you sell or die.
(9) In 2013, if you have a second property and are presently paying the non principal private residence tax of €200, you will continue to pay that tax in 2013, IN ADDITION to the new charge. From 1st January 2014, you will only need pay the property tax, with the NPPR abolished, but only from 1st Jan 2014.
(10) Rental income will be subject to PRSI, typically about 4%.
(11) Real Estate Investment Trusts will be introduced in 2013. REITs are managed property investment funds and allow ordinary investors to invest in property without investing large sums with tax incentives. Typically, you buy a share in a property fund and then you get income on your share from rent and if property is sold at a profit. If you want out of the fund, you can sell your share. REITs have been promised since this administration came into office.
(12) There was no change to the incentives offered in last year’s budget, but mortgage relief for first time buyers will be ended as previously indicated by the end of December 2012. However first time buyers in 2013 will be exempted from the new property tax for three years.
Estate agents and property consultants Lisney have been quick out of the gates and have provided a response to the Budget 2013 announcements. They criticise the structure of the new property tax for a variety of reasons including no account of stamp duty and that it should be on occupiers rather than owners. With respect to REITs, James Nugent, the managing director of Lisney has this to say:
“REIT’s are publically traded property companies, where the majority of the assets of the company are income producing real estate assets. This will provide liquidity to the market and will allow investors participate in areas of the property market that they would not traditionally have had the opportunity to enter, i.e. it will allow them invest small sums of money in large-scale commercial properties. Given the relatively small size of the Irish market, it is likely that there will only be a limited number of REIT’s established, perhaps two or three. It is positive that this is being introduced at a time when property values are low. This is contrary to the situation in UK when they were introduced at the height of the market in 2007 and suffered large losses within a short period of time due to the falls in property values. REIT’s are also positive from the point of view that they will provide a new source of funding for property companies. A return of a listed property sector is to be welcomed, the added benefit of no taxation at company level is good news for the investor.”
via NAMA Wine Lake.
via NAMA Wine Lake.
The Budget will contain revenue raising measures amounting to €1.25bn, and cuts in spending amounting to €2.25bn.
It is the second budget of the Fine Gael-Labour coalition and the fifth austerity budget in a row.
Mr Noonan will begin at 2.30pm and his speech, expected to last around 45 minutes, will focus on revenue raising measures.
It will be followed by a similar contribution from Labour’s Brendan Howlin who will outline spending cuts.
Throughout the afternoon there will be briefing sessions at which individual ministers will outline the implications for their departments.
The first vote is due just after tea time.
The Government is seeking to save €1 billion over the next three years in a new deal on reform and productivity with the public service unions.
Minister for Public Expenditure and Reform Brendan Howlin yesterday invited the unions to talks designed to achieve, by agreement, further substantial savings in the public service pay and pensions bill. The Government is hoping accord can be reached by early in the new year.
Unions expect one of the main changes the Government will propose is longer working hours for staff with no additional pay. Other issues such as increments, premium pay rates and possibly reforms to existing grade structures could be on the agenda for the discussions.
Senior higher-paid staff who already work flexible hours could face cuts in their overall pay levels. Earlier this year, the Health Service Executive proposed staff should work two additional hours per week for the next three years.
The Government said yesterday the guarantees set out in the Croke Park agreement, no further cuts in core pay and no compulsory redundancies, would remain in force.
Government sources emphasised that savings of €1 billion in the pay and pensions bill were required by the end of 2015 “to meet the fiscal challenges” demanded by the bailout programme.
No precise details
However, the Government side declined to spell out precisely the nature of the reforms to work practices and the new productivity measures it would be seeking.
The Department of Public Expenditure and Reform said the Government would be seeking to secure “a significant advance” on the workplace change already delivered by public servants, and “a large sustainable additional fall in the cost of public service delivery in the period to 2015”.
“The Government is determined to meet its fiscal consolidation targets and reduce its deficit to less than 3 per cent by 2015. The gross public service pay and pensions bill accounts for 35 per cent of overall spending in 2012. On this basis, the Government considers that it is fair that it should contribute broadly one-third of the substantial expenditure consolidation that will be necessary over the next three years,” said the department.
It added that if the public service pay and pensions bill was to make the necessary contribution to the consolidation in expenditure necessary up to 2015, a new deal, setting out a new agenda for change and productivity, was necessary.
“The Government will also be seeking to secure an additional substantial reduction in the cost of public service delivery, including in 2013, through this process. We want to secure a significant evolution on the workplace change already delivered . . .” it said.
The public services committee of the Irish Congress of Trade Unions is to meet today to consider the Government’s invitation to talks on a deal. The largest public service union, Impact, will argue this should be accepted. Other unions were more cautious.
In a letter to Impact branches yesterday, union general secretary Shay Cody said members would benefit from an extension of Croke Park protections in light of dark forecasts.“The union will go into any talks with the objective of protecting members’ pay and pensions against further cuts . . . Achieving success will mean agreeing to measures that cut the public service pay bill in other ways.”
General secretary of the Civil Public and Services Union Eoin Ronayne expressed concern over whether lower-paid workers could achieve further cost savings.
Talking the talk on sharing the pain will not suffice for a Coalition that continues to defend its indefensible privileges
NEXT MONTH’S budget will be a moment of truth for the Coalition and it really needs to come up with a bold gesture to show the public that it is going to lead by example when it comes to the imposition of further hardship.
An analysis of the generous ministerial pension regime published earlier this week by The Irish Times was a reminder that the elite among the political class are still pampering themselves, despite the severe cutbacks affecting other members of society.
The analysis put the market value of the pension entitlements of the current Cabinet at €36 million, but it did not take account of the far greater cost of paying very generous pensions to a range of senior politicians who have already retired.
The actuarial cost of that would easily exceed €100 million. For instance Mary Robinson has an annual pension of €187,297 for her 6½ years in Áras an Uachtaráin and 20 years in Seanad Éireann.
Funding a pension of that magnitude for somebody in the private sector would cost a minimum of €6 million and possibly much more. The pensions paid to former taoisigh and former government ministers are not far behind, ranging from about €120,000 a year for most of the ministers in the last government to over €150,000 for Bertie Ahern and Brian Cowen.
Robinson and Ahern have gifted part of the pensions back to the State, but their entitlements are extraordinary and appear to be wildly in excess of the pension arrangements for public figures in other EU countries.
Given the scale of the financial crisis facing the country, and the fact that it has taken the bailout to keep the State functioning for the past two years, it is amazing that no effort has been made to scale back the pension entitlements of former as well as current politicians.
As with other parts of the public service, new entrants into politics in 2010 suffered a significant reduction in entitlements and will be able to claim pensions only at the age of 65, but for the older generation of politicians, almost all of the entitlements they amassed during the boom are intact.
To be fair the current crop of politicians have taken a series of pay cuts since the start of the crisis but their salaries are still among the highest in the democratic world and those already on pensions have hardly been touched.
The excuse given by Minister for Public Expenditure and Reform Brendan Howlin for not touching some of the most privileged pensioners in the country is that they had “a legitimate expectation” that the current arrangements would continue to apply, regardless of the pressure on the State’s finances.
Strangely enough “legitimate expectation” does not seem to apply to those outside the public service. People in private sector pension schemes have received letters in the past two months informing them that their future entitlements will be cut as a result of the levy on pension funds introduced by the Government last year to fund its jobs initiative.
Politicians are not the only ones to benefit from enhanced public sector pensions. Judges, semi-State senior executives, Army officers and gardaí all benefit in varying degrees from a system that nobody in the political world appears willing to challenge.
How public service pensions of all kinds will be funded in the future is an issue that will have to be faced at some stage. The most recent estimate in 2009 of the accrued liability to the State for public service pensions was €116 billion.
Given the flood of early retirements since then, that figure is now undoubtedly much higher. An official report published during the week pointed out that public service pensions now account for 14.8 per cent of the annual pay bill, up from 8.5 per cent in 2007.
The figure has risen by 67 per cent – up from €1.5 billion in 2007 to €2.5 billion this year. Yet the political system is paying scant regard to how this escalating liability can be put on a sustainable basis into the future.
The immediate danger facing the country as it heads into its final phase of reckoning for the excesses of the boom is that the contrast between the way different groups have been treated will lead to a breakdown of the social cohesion that has been such a feature of the crisis.
About 75 per cent of the adjustment required to get the State’s finances back on track has already been achieved. The final 25 per cent is probably going to be the most painful of all and it will take a lot of political skill and courage to see it through to the end.
That is why it is imperative that the Coalition comes up with a budget package that demonstrates a genuine commitment to fairness rather than paying lip service to the notion while continuing to protect its own privileges.
The unremitting focus by the Coalition and its opponents on the bank debt has, if anything, only obscured the real choices facing the country.
The Government has overhyped the scale and timing of a debt deal while the Opposition has been far too dismissive of its prospects.
The likely outcome is that a deal on the debt will ultimately be done but it will not happen quickly and the precise nature of the arrangements will probably not become clear until the end of next year.
Just as Albert Reynolds got the £8 billion from the EU in the 1990s, despite the dismissive claims of his political opponents and media critics, Enda Kenny will most likely deliver a substantial deal on the bank debt, but it is going to take time.
The more critical challenge facing the Taoiseach and his Government is the fact that the public finances remain in a parlous state due to the collapse in tax revenues after 2008, combined with the failure to rein in expenditure. So far the Coalition has managed to keep on course towards a more sustainable budgetary position, but imagination as well as gritty determination will be needed to see the job through.
The two key Ministers dealing with the troika of international lenders marked the end of the eighth quarterly review of the programme yesterday by saying the emphasis of all parties had now shifted to ensuring Ireland was the first programme country to re-enter sovereign bond markets.
Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin both gave an upbeat assessment of how Ireland had performed in the two years since the European Commission, the European Central Bank and the International Monetary Fund began overseeing the Irish economy.
In contrast, the troika raised more concerns about risks and programme implementation during next year than in previous reports on Ireland’s progress.
In a statement, it praised the “steadfast” performance of the Government in meeting targets but also highlighted a number of “significant risks” and concerns for next year that it implied the Government needed to address urgently.
These included overruns in the health sector.
It also described unemployment, especially among young people, as “unacceptably” high and was critical of job activation programmes, which it said needed to be more vigorous, and needed also to involve the private sector.
It also referred to the critical issue of mortgage arrears where it said “intensified efforts” were required.
Speaking at a press conference in Government Buildings, Mr Noonan disclosed that the European Union was working on a paper that would be ready by Christmas outlining the options Ireland could take during next year to exit the programme.
He also set out key political aims that would ease Ireland’s passage back into the international bond markets.
These included a deal on the historic cost of recapitalisation, and also a statement from ECB president Mario Draghi that Ireland could avail of the ECB bondbuying programme before exiting the bailout.
Mr Noonan said such a statement could reduce the interest on Ireland’s longterm borrowing by up to two percentage points.
One option, he said, would be to raise €17 billion next year to put 18 months of sovereign funding in place and then to maintain that reserve.
That would insulate Ireland from unforeseen events or systemic shocks, he said.
Mr Noonan said he was very confident Ireland would exit the programme by the end of next year “in all circumstances”, irrespective of getting relief on the historic cost of bank recapitalisation.
Mr Howlin pointed out that Ireland had drawn down 80 per cent of the €67 billion loan from the troika and had fulfilled 160 conditions.
“We are the most successful programme country. We have hit all the targets,” he said.
Separately, a highranking member of Germany’s central bank warned against using Europe’s nascent banking union to deal with “past sins”.
He insisted he was not trampling over Irish hopes for debt relief but said people should be “particularly realistic” about what was doable or not.
“Mutualising the risks from legacy assets could well overburden partners – fiscally or politically – and you should not do that,” he said.
“Nobody wants to dash any hopes. Everybody wants Ireland to stay on track and get over the crisis and be successful.”
From The Irish Times