State to miss Spring economic deadline, says Noonan

The Government may miss its deadline to submit its Spring economic statement to the European Commission, Minister for Finance Michael Noonan has said.

Speaking as he arrived for a meeting of euro zone finance ministers in Brussels, Mr Noonan said he planned to inform the Commission that Ireland “may or may not make the April target”.

“It will be dependent on the formation of the government...because whatever is in the spring statement will be the boundaries for the incoming government and whoever is in the incoming government will want to participate in that.”

Ireland is obliged to submit a Spring economic statement to the European Commission under the rules of the European semester .

Mr Noonan said that while there had been no adverse reaction to the inconclusive outcome of the Irish general election by international markets, a protracted period without a government could lead to a rise in bond prices.

“I’ll be consulting with my finance minister colleagues today and tomorrow,” he said as he arrived for two days of meetings. “On everything I’ve read and been briefed on so far there isn’t any international anxiety, but we’ll see what happens. Obviously if a government was not formed for a significant period then anxiety will begin to appear in the markets and would be expressed in bond prices.”

Mr Noonan reiterated comments from Taoiseach Enda Kenny earlier in the day that a taoiseach was unlikely to be appointed when the Dáil meets on Thursday. He also suggested that discussions would begin between the Taoiseach and Fianna Fáil after Thursday.

“I think the sequence is to proceed and to take all steps possible to form a government. As you know, the Taoiseach has got involved in a series of discussions, starting with individual independents and smaller parties, and that will evolve after Thursday into discussions with Fianna Fáil and then we’ll see where that goes.

“I think the important thing now is to form a government in Ireland as quickly as possible – that’s what’s in the national interest. The personalities are secondary to the national objective of having a government that reinforces confidence in Ireland, and makes sure we can continue with the very successful progress we have made, especially over the last two years.”

Fiscal space

Asked whether the controversy around the amount of fiscal space available to the Government had affected the election result, Mr Noonan said the figures presented by the Department of Finance had been correct. “Everyone accepts now that they were the correct figures,” he said.

“I don’t think there was any confusion around fiscal space. It’s a complicated issue, and anybody who looked at the figures knows that the figures that the Department of Finance had brought forward were the correct figures and those that said they weren’t correct didn’t produce a shred of evidence to the contrary.”

He confirmed that the European Commission had endorsed the -0.5 per cent of additional fiscal space.

“There’s an extra €1.5 million in fiscal space available to the incoming government,provided the incoming government decide to avail of it. From a legal point of view the Commission have now signed off, it will be up to the incoming government to decide where they pitch that and they can take any number from 0 to minus 0.5.”

Euro zone finance ministers are due to discuss the latest on the Greek bailout today, amid concerns about the pace of implementation of the third Greek bailout programme which was agreed last year after months of acrimonious negotiations.

While Commission bailout monitors returned to Athens in January, negotiations stalled over the bailout programme and amid diverging views between the European Commission and IMF on debt sustainability for Greece. The IMF has not yet committed to involvement with the third Greek bailout programme, which many EU countries see as a precondition for European involvement.

Bailout review

Speaking on his way into today’s eurogroup meeting, EU economics commissioner Pierre Moscovici said he was confident that mission chiefs “could and should” return to Athens with the prospect of concluding the review as fast as possible.

Asked about the state of play with the Greek bailout, Mr Noonan said there was a divergence in terms of the numbers being presented by the key creditors.

“It depends on which set of figures you look at. If you look at the Commission’s figures, Greece is not in a bad position, but if you take the IMF view of things, Greece needs to do more, s I would be very interested today in listening to the Commission and IMF laying out their respective positions.”

Mr Noonan said he had always been sympathetic to the Greek position. “I was one of the people who pulled Greece back from the verge when it looked like they wouldn’t survive in the euro zone, and I will continue to approach it with a lot of sympathy for Greece today, and for the Greek people in particular.”

He also said he was confident that Cyprus would exit its bailout programme.” I’d like to wish them every success. It seems to me they’ve done a very good job,” he said.