Ireland and IMF taking steps to prepare for bailout exit in 2013, says Noonan

Fri, Nov 23, 2012, 00:00

A number of measures, including access to dedicated credit lines, are to be put in place to ease Ireland’s exit from the bailout programme, the Minister for Finance, Michael Noonan, said yesterday.

Speaking at the American Chamber of Commerce’s annual Thanksgiving lunch, Mr Noonan said the IMF was preparing a policy paper outlining transitional measures that Ireland should take as it exited the bail-out programme, which would be presented to the Minister for Finance before Christmas.

In parallel, Irish officials are drawing up a policy paper from the Irish side.

Credit

While access to a dedicated credit line is one transitional measure being considered, Mr Noonan said the NTMA should be required to hold about €16 billion or €17 billion of cash on hand, which would allow the state to be funded for up to 18 months, as a protection “against all eventualities.”

“We are positioned to get back into the markets at low interest rates in 2013,” Mr Noonan said, pointing out that ESB, Bord Gais and Bank of Ireland had raised money on the markets recently.

The Minister for Finance also reiterated the importance of the 12.5 per cent corporate tax rate. “We are under no pressure whatsoever. Not only is it a non-negotiable rate, nobody is asking us to do anything with it. In the European community, tax rates are a matter for sovereign governments and this tax rate remains at 12.5 per cent and will not be changed.”

American chamber president Peter O’Neill highlighted the importance of competitive personal taxation rates in attracting management talent.

“Ireland can not afford to price itself out of the market for this top management talent. increase in personal taxation is a tax on talent,” he said.