Noonan says debt conference on Greece not necessary

Minister for Finance Michael Noonan has said that a proposed European debt conference is “not necessary yet” as he gave his first response to yesterday’s Greek elections which saw radical left party Syriza top the polls.

Asked about his comments earlier this month in which he indicated his broad support for a debt conference, Minister for Finance pointed out that all bailout negotiations so far had been conducted within the context of the eurogroup.

“I don’t think it’s necessary yet. Cyprus and Greece and Portugal and Ireland and Spain have all been resolved by negotiations at euro group and ecofin and there’s no suggestion that that model won’t succeed again. I have no doubt even without going to the meeting, that there’s sympathy for the Greek people and that there would be a disposition among colleagues to be helpful .”

Euro zone finance ministers are meeting today for a eurogroup meeting at which the elections in Greece will dominate discussions. Greece will be represented today by the outgoing Greek finance minister Gikas Hardouvelis.

Speaking in Brussels, Minister Noonan said that Ireland had itself contributed € 350 million to the Greek bailout , hence there was “€ 350 million of Ireland’s taxpayers’ money at play.”

Asked if a Greek debt restructuring would have implications for Ireland, Minister Noonan said that Ireland had already significantly restructured its debt, through various mechanisms such as extension of maturities, and the restructuring of IMF loans.

“The issue for Greece is not debt cancellation, it’s the affordability of the debt - that means the interest rate and the maturities,” he said pointing out that restructuring is more difficult when yields are running at close to 9 per cent as in the case of Greece, rather than 1.7 per cent in the case of Ireland. “Our debt is in a very good position now - it’s affordable and it’s repayable.”

He said Ireland’s quest for retroactive direct recapitalisation from the ESM fund for AIB and Bank of Ireland was still on the table, even though the government is looking into options for selling AIB.

“There are alternatives that might suit the taxpayer better, like selling the shares on the market. Direct recap always involved selling bank shares to the European ESM but a better alternative may be to sell on the market and that’s why we have retained financial advisors to advise us on which way to go , but both options are still there. “

He said that it was important that the newly elected government in Greece was respected fully. “Everybody has to respect that choice, and everybody has to treat them like equals in this forum here.”

“I have no doubt even without going to the meeting, that there’s sympathy for the Greek people and that there would be a disposition among colleagues to be helpful ,” he said. He pointed out that Greek people don’t get any welfare payments after being unemployed for 12 months, the minimum wage and unemployment assistance is half of what it is in Ireland, and that the country has an unemployment rate of 25 per cent.

“There’s a general appreciation that it’s difficult for a lot of people in Greece and there’s not a great surprise that that would manifest itself in the polling booth.”