Skip to main content

IMF & EU's €9bn Profit On Irish Bailout...

Noonan spells out high cost of our rescue...

THE IMF and EU will make a €9bn profit over the lifetime of the bailout loans to Ireland.

Finance Minister Michael Noonan last night revealed for the first time just how much the international agencies will make if the €85bn in loans are drawn down in total.

The British government is also entitled to send auditors and accountants here to check the books as part of its bilateral deal to Ireland, the Irish Independent has learned.

It is also insisting that if Ireland ever leaves the euro the UK must be repaid in full and in sterling -- and not in any new Irish currency.

The developments come as the IMF-EU bailout team arrives back in Dublin today to begin the latest examination on whether the Government is meeting the terms of the €85bn programme of aid.

The progress of public sector reform and changes to wage-setting systems for low earners will be discussed in talks with IMF-EU bailout team.

And it also appears likely the Government will have to seek an extra €400m in savings in December's budget if the official outlook for economic growth worsens.

Mr Noonan said yesterday that he may have to slash €4bn from Government spending next year to meet the IMF-EU budget deficit target, rather than the €3.6bn previously flagged.

He said the international agencies want the deficit to be reduced to 8.6pc of gross domestic product in 2012.

The present plan pencils in €3.6bn of savings to meet this target but also relies on high economic growth to push down the deficit.

But the Finance Minister gave no indication that the Government was near achieving a 1pc reduction in the interest rate on the loans, which would save €150m per annum.

Mr Noonan said France and Ireland continued to disagree about proposals on the corporation tax base.

Tanaiste Eamon Gilmore made a keynote speech on Ireland's relationship with the EU this week without mentioning a cut to the bailout interest rate.

Mr Noonan also revealed for the first time just how much the international agencies will make if the €85bn in loans are drawn down.

When all the loans are put together, Mr Noonan said: "The total margin applying under existing arrangements could be of the order of €9bn over the period."

Although the Government has another three months to show the reforms in the public sector and for low-paid workers are being delivered on, the pace to date is expected to be flagged in talks with the IMF-EU team.

Enterprise Minister Richard Bruton's contentious labour market reforms will be touched upon in talks over the coming weeks with the IMF-EU team -- a move expected to strengthen the minister's hand in his negotiations with the Labour Party.

Mr Bruton's proposals to end Sunday premium pay were not discussed by the Cabinet yesterday. The final decision on the proposals will take into consideration both the IMF-EU team's views and a High Court case challenging the constitutionality of the joint labour committee agreements.

The team from the International Monetary Fund, the European Commission and the European Central Bank will begin their latest three-month review of the €85bn international bailout today.

Mr Noonan said he and his officials will be discussing a range of economic and budgetary issues, including the current outlook for 2012.

"On the review due to take place next week, we have not signalled any major items for renegotiation. However, during the quarter in the run-up to the budget there will be items for renegotiation because the manner in which we will make the correction in the budget may not accord with what is in the memorandum of understanding," he said.

"As long as our approach is fiscally neutral, we will be in a position to substitute one measure for another," he added.

Mr Noonan said the previous review agreed "major changes", including the jobs initiative, an expenditure review and a review from 2012 to 2015.

The minister said the programme negotiated by the previous government was to run straight through to 2014, but "there is now a commitment to a review following the first two budgets, which is significant".

The IMF is expected to give the thumbs up to the Government's progress so far in meeting budgetary targets, recapitalising the banks and bringing in the jobs initiative.

As part of the €85bn bailout package, the British government is lending €3.5bn.

Report by Fionnan Sheahan, Emmet Oliver and Donal O'Donovan - Irish Independent

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu...

As Featured On Dublin Postcards, Ad's, U2 Video...

I see in the Irish Independent today an item concerning a favourite, Dublin landmark, of mine... "THEY have featured in numerous postcards and a very famous Guinness ad, but perhaps their most important cameo appearance came when they featured in U2s 'Pride (In The Name Of Love)' video. However, Dublin City Council does not believe the Poolbeg chimneys are iconic enough to place on their Record of Protected Structures. Following a request from Cllr Dermot Lacey (Lab) to have the landmark ESB chimneys placed on the protected record, city councillors heard that city planners had conducted a survey, history and full assessment of the chimneys. They concluded from this that while the Poolbeg chimneys were considered to be of a certain level of architectural, social and historical significance, they were not of sufficient value within the meaning of the Planning and Development Act, 2000. Complex The twin red and white chimney stacks measure 680 feet in height and were construc...

Developers Cut New Home Prices In Dublin...

Developers cut prices of new homes in Dublin... Developers have sharply reduced prices at some of Dublin’s bigger housing schemes this weekend, in a bid to stimulate sales of vacant units and entice first-time buyers into the market. Price reductions of up to €150,000 are being offered at the latest releases of apartments and houses for sale. P Elliott & Co has put a total of 80 units at four of its apartment schemes, on to the market through Hooke & MacDonald, at substantially reduced prices. Prices now start at €169,000 for a one-bedroom apartment at Arena in west Dublin, while a two-bedroom apartments at Mellowes Quay in Dublin 8 now costs €269,000, down from a high of €415,000 in spring 2007. Jackson Homes, Kingscroft Developments and Durkan New Homes have also reduced prices at their schemes by about €100,000, or up to 30 per cent on peak levels. Estate agents reported strong enquiries ahead of this weekend’s releases. ‘‘Based on the level of enquiries we’ve had, we expect...