Euro crisis: “categorically there will be absolutely no bailout next year in Ireland”

A series of Irish government ministers have been clarifying their position after the Minister for Transport, Leo Varadkar, appeared to suggest that a second bail-out could be required for Ireland next year.

Minister for Finance Michael Noonan

“The programme is due to run until the end of 2013 and the start of 2014 and there is sufficient money in the programme to meet all eventualities so categorically there will be absolutely no bailout next year in Ireland,” Mr Noonan stated.

“The main issue he [Mr Varadkar] raised was whether Ireland would be going back into the money markets or not next year.

“The programme has its schedule that we would be going back in a tentative way, into the markets, at the end of 2012, but the programme doesn’t say we will be fully back. We will act in accordance with the advice of the National Treasury Management Agency (NTMA). We are hopeful that we will be in the markets in a small way by the end of 2012, but obviously the main funding for Ireland will be coming from the IMF and the European Union until the end of 2013,” he added.

“The advice on that will come from the NTMA depending on circumstances and that is still the Government’s policy to get back into the markets in 2012. There is stuff happening every week, and we will have a better idea of how Europe is shaping to deal overall with the crisis after they resolve the Greek situation on June 23rd at their meeting in Luxembourg,” Mr Noonan said.

Jobs, Enterprise & Innovation Minister, Richard Bruton

Speaking to a group of European correspondents in Brussels, Minister Bruton said comments by Minister Varadkar were ‘taken out of context’.

Mr Bruton said funding was available under the EU-IMF programme until the end of 2013 so there was ‘no absolute need’ to return to the markets before then.

There was also ‘headroom ‘available, since only €24 billion of the €35 billion allocated for bank recapitalisation would be needed, and of that €24 billion, an element would come from the contribution of junior bondholders at AIB and Anglo Irish Bank.

Mr Bruton said the NTMA would advise on the best timing to return to the market, suggesting that the return would be gradual and there would be no need for a ‘massive requirement’.

An Taoiseach Enda Kenny

An Taoiseach Enda Kenny has also said there will be no need for any second IMF/ EU bailout for Ireland.

Speaking in Claremorris he said the country was meeting the conditions at the first review of the current bailout which is due to end in 2013 and the country had sufficient funds in all circumstances.

He said: ‘Let me say with absolute clarity there would be no need for a second bailout.’

He said it was never the Government’s intention to go back on a full scale basis to the markets before the end of 2012.

But with market conditions worsening, has it become so serious for Ireland, you have to lie?

Perhaps not quite yet…

Looking further afield, it seems that no-one is backing down.  From the Irish Times report

Meanwhile, Greece’s conservative opposition has demanded lower taxes as a condition for reaching a political consensus with the Socialist government on further austerity measures, which Brussels says is needed to secure any further assistance.

Conservative leader Antonis Samaras called for a flat 15 per cent corporate tax and rejected government plans for hiking taxes to tackle Greece’s budget deficit and please fiscal inspectors mulling the next, key tranche of a €110 billion bailout. “You want to raise taxes and reach consensus with us, who have set reducing taxes as a priority? Don’t even think about it,” Mr Samaras said in remarks addressed to the government.

“Lower tax rates are the key to starting the engine of the Greek economy,” he told members of parliament from his New Democracy party. “If you raise taxes, there will be no room for consensus or for renegotiation.”

Greek newspaper Kathimerini  said finance ministers of the 17-country euro zone may hold a special meeting next Monday on a new package. European Commission spokesman Amadeu Altafaj dismissed the report as “unfounded rumours, once again”.

Hmm… once again…

And Derek Scally, in the Irish Times, has an informative piece on Frau Bundeskanzerlin’s dilemma.

It may be too late. Germany’s relationship with the EU has deteriorated to such an extent that, among Berlin watchers, a popular parlour game is guessing who will try to scoop up Germany’s new EU critical voters in the 2013 general election. A year into the euro zone crisis, the feeling around the continent is that Germany is falling out of love with Europe. But what if we are dealing with a problem of perception? Merkel has picked up the nickname “Madame Non” for her habit of stalling on bailout deals. At home critics could dub her “Frau Ja” for talking tough ahead of EU meetings and, in their eyes, returning home after apparently caving on every point.

She is trapped between accusations of a “German diktat” and claims that Berlin is dragging its heels. Another perceived problem lies in how, from the outside looking in, Germany is a wealthy country with a booming economy that, motivated by selfish arrogance, is delaying rescues and the revision of bailout terms. But what seems like arrogance from the outside is, in fact, prickly vulnerability.

After two decades of financing German unification, greying German voters are smarting at the idea of another money pit, underwriting the rescue of a single currency they never wanted to begin with. The Bild tabloid has channelled this put-upon, self-pitying mood into a feeling of righteous indignation. It will take a brave politician to challenge this view and tell a few unpleasant truths about the role played by Germany, its banks and its trade surplus.

And if they’re all sheep…

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