Noonan admits bailout exit decision was ‘finely balanced’

Minister for Finance speaking in Dáil ahead of a vote on Government’s go it alone strategy

Minister for Finance Michael Noonan was addressing the Dáil ahead of a vote on the Government’s bailout exit policy this evening. Photograph: Frank Miller/Irish Times

Minister for Finance Michael Noonan was addressing the Dáil ahead of a vote on the Government’s bailout exit policy this evening. Photograph: Frank Miller/Irish Times

Wed, Nov 20, 2013, 13:06

Minister for Finance Michael Noonan said today the decision to exit the bailout programme without a backstop was a “finely balanced” one.

However, he insisted it was “the right decision” for the country and “the right time” to make the decision.

The Minister was addressing the Dáil ahead of a vote on the Government’s bailout exit policy later this evening.

Mr Noonan said the muted market reaction to the announcement illustrated the market’s view that the Government’s decision was both correct and timely.

He said confidence in Ireland had improved considerably in recent months, noting that yields on Irish Government bonds were now at record lows.

“Interestingly, our yields are now lower than the yields for some of the Eurozone countries that would have had to approve a precautionary credit line for us.”

Mr Noonan also noted that the country now had substantial cash reserves estimated to be in excess of €20 billion by the end of the year, which would “act as a domestic backstop”.

“We have lived up to our programme commitments, we have stabilised public finances and introduced frameworks for economic management supported by independent oversight.”

“While there are challenges and risks, we are confident that over the past three years we have demonstrated a strong track record of managing the programme and of ensuring that we are now normalising the economic and financial situation into the future.”

Mr Noonan said Taoiseach Enda Kenny had held discussions with German chancellor Angela Merkel on finding ways to reinforce economic recovery here by improving funding mechanisms for the real economy, including access to finance for SMEs.

As part of this, the German government had asked KfW, the German development bank, to work with the German and Irish authorities, he said.

Mr Noonan said his department had exchanged working papers with German officials on how the bank would assist Ireland with development funds.

He also said discussions with Irish officials and officials from Germany were held yesterday.

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