Noonan in Paris for bailout talks
Minister for Finance Michael Noonan has said it could be in Ireland's interests to push beyond October the deadline for a deal on banking debt relief.
Speaking after a meeting with his French counterpart Pierre Moscovici in Paris this morning, Mr Noonan said the Government would like to have an agreement in place before the December budget, but that this was not essential.
Euro zone finance ministers had endorsed a late October deadline for a plan to ease the weight of Ireland's multi-billion-euro debt, but there are growing signs that the timeframe will be revised as discussions continue between Dublin and the troika of the European Commission, the IMF and the European Central Bank.
"We understand that it might be in the Irish interest if the timeline were extended somewhat," Mr Noonan said. "It would be ironic if we agreed to something before the end of October and a more advantageous arrangement was available later, after arrangements with Spain have been concluded."
Central Bank governor Patrick Honohan last week indicated that moves to tackle banking debt were focused on Spain, with a "read-across" later to Ireland.
"I'm still working towards the end of October as the deadline, but we're not going to be unduly concerned if, for good and sufficient reason, it drifts a little bit," Mr Noonan said.
Asked whether it was important to have an accord in place before the budget in early December, Mr Noonan said: "Obviously there are issues that would come across the organisation of the budget. It's something that we would like, but it's not vital.
"It doesn't really change the budget arithmetic, because our intention would be that, if we get the kind of arrangement we're seeking, that we will use the gain to reduce the debt and make it more sustainable. The second part of it then would be the servicing costs of the reduced debt, there would be savings obviously on the current side, and we would like to apply those to the programme as well."
Given that Ireland's request includes bank recapitalisations from the ESM bailout fund, any agreement is closely bound up with separate discussions on the introduction of a powerful new euro zone bank supervisor.
In June, EU leaders agreed in principle to separate banking debt from sovereign debt, and pledged to look at ways of improving the sustainability of Ireland's bailout programme.
However, Germany's finance minister Wolfgang Schäuble recently signalled reservations about giving the Irish a better deal, while the ECB remains sceptical about any recasting of the €47 billion Anglo Irish Bank promissory note scheme, another key Government objective.
An agreement between Dublin and the troika would have to be signed off on by EU heads of state and government, and Mr Noonan's visit to Paris is part of a wider campaign aimed at building political support for a deal. He will also travel to Berlin and Rome before arriving in Cyprus for an informal finance ministers' meeting on Friday.
Mr Noonan said the French had a "very good understanding" of the Irish request, but recognised that technical work had to be completed before it became an issue for political discussion. "They're committed to implementing the statements in principle that were made on June 29th in a practical way," he said.