Ireland 'still seeking debt deal'

Minister Brendan Howlin and Michael Noonan at a press conference to mark the bailout exit today. Picture: PA

Ireland will continue to fight European finance chiefs for a deal on its legacy bank debt, Finance Minister Michael Noonan has said.

As the country marked its exit from the EU/IMF €85bn loan programme, Minister Noonan said it will still pursue a restructuring of the lenders’ debt.

The minister praised the Irish people for their sacrifices.

“Everybody owes a debt of gratitude to all those Irish men and women who have made such sacrifices to get us out of the greatest crisis that this country has experienced since the famine,” Mr Noonan said.

“It wasn’t easy for anybody. I would say that the Government is committed now that this will never happen again and will take the measures necessary to ensure it will never happen again.

“The Government is committed as well to creating jobs, getting people back to work, getting our emigrants to come back home so that families can be reunited again.”

Ireland’s finances, budgets and policies have been under intense scrutiny since the country agreed to a massive loan package in 2010.

Its debt masters, a Troika of the International Monetary Fund (IMF), the European Central Bank and European Commission, have carried out 12 intense reviews over the last three years and imposed a series of tough targets, all of which were met by the state.

The Irish public has endured four austerity budgets since the EU/IMF agreed to grant the bailout.

Over those three years, the Government has hiked taxes to the tune of €5.3bn and cut public spending by a cumulative €9.6bn.

The country’s unemployment rate had soared above 15% before the start of the bailout.

Mr Noonan was honoured today by the German-Irish Chamber of Industry and Commerce with an award for achieving the bailout exit.

In the years before the banking crisis in 2008, Ireland enjoyed virtually full employment.

The country will officially exit the programme on Sunday when it will be able to re-enter the money markets.

Mr Noonan said there will be a “change in perspective” come Monday morning, but there will be no major change to the nation.

He said while there was cause to celebrate Ireland’s regained control of its own economic destiny, this is not the end of the road toward sustainability.

The minister said Ireland’s current debt level of 124% of gross domestic product (GDP) is well above the European average of 94%.

He said the country will therefore continue to pursue the retrospective recapitalisation of Irish banks.

But he pointed out this is not Ireland’s only option for driving down its massive debt.

“Yes, we’re pursuing it,” Mr Noonan said.

“But it’s not the only method we have of making the debt more sustainable and taking it down to the European average, and then proceeding in accordance with the stability treaty with fractional reductions each year until we get down to 60% of GDP.”

He said the Government planned to run a structural surplus in 2014, which turns debt trajectory downwards.

The Government will also use the proceeds of the eventual sale of its shares in the banks to drive the debt down further.

The minister warned that Ireland must not “go mad” as it shakes off the tight clutches of its debt masters the Troika.

He echoed public expenditure minister Brendan Howlin, who insisted the nation must remain prudent.

“What we need to do now politically is to build a new consensus around a series of objectives. First of all that this must never be allowed to happen again,” Mr Noonan said.

“I think we’ll get consensus on that – that the primary objectives are in growing the economy and creating jobs.”

As Ireland becomes the first Eurozone state to have successfully completed a strict bailout programme, the European Commission today released its final tranche of funding to the country.

President Jose Manuel Barroso congratulated the Irish Government and the Irish people for the achievement.

“Thanks to their efforts and sacrifices, Ireland will now be able to finance itself through its own efforts,” Mr Barroso said.

“Today’s result would not have been possible without the solidarity and significant financial support of the other EU member states.

“I would also like to pay tribute to the efforts and contribution of the European Central Bank and the International Monetary Fund to the wide-ranging reform programme, which has now been successfully completed.”

The Commission released €0.8bn of a total €67.5bn made available over the past three years.

Alongside European lenders, the IMF will also disburse its last payment of €0.6bn under the programme.

A remaining €17.5bn of the massive €85bn bailout was funded from Ireland’s National Pension Reserve – a burden shouldered by the country’s hard-pressed taxpayers.

Mr Noonan dubbed Ireland’s citizens as the “heroes and heroines” of the story, while his colleague Mr Howlin declared: “Thank you.”

He added: “We’ve reached this milestone and we have a much greater control over our own destiny into the future.

“And that is a huge testament to the fortitude and the forbearance of the people of Ireland, who rolled up their sleeves and understood that a job of work had to be done.”

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