Coalition denies IMF vote confusion

Tue, May 1, 2012, 01:00

THE GOVERNMENT has dismissed suggestions that its senior Ministers are sending out “mixed messages” about the State’s funding choices in the event of a No vote in the fiscal treaty referendum.

Tánaiste Eamon Gilmore yesterday said rejecting the treaty, which proposes tough new budgetary discipline on each euro zone state, would plunge Ireland into unknown territory and there was no guarantee the International Monetary Fund would provide funding. Asked to comment on a report in the Sunday Times that Ireland could apply to the IMF to continue funding the country in the event of a No vote, Mr Gilmore seemed to accept that an application could be made but emphasised the uncertainty, limit and remote possibilities of any outcome.

“I think the story was that we could apply to the IMF. Of course we don’t know what the outcome of that [application] would be.

“To date, the IMF have taken the view that they will only support European countries in the context of a European bailout.

“That’s why you have a three-way arrangement for the present programme, involving the IMF, the EU and the ECB.

“Secondly, of course, the IMF has a limited amount of funding.What we do know is that, if the treaty is passed, there will be certainty that Ireland would have access to the European Stability Mechanism if we were to ever need that. But if the treaty is defeated, you are, at best, into the unknown.”

Mr Gilmore’s comments did not seem to be as categorical in ruling out this avenue completely as those of Minister for Finance Michael Noonan on Sunday, when he said the ESM would be the only source of bailout funds when the Irish programme ends.

However, a spokeswoman for Mr Gilmore said there was no inconsistency between what he and Mr Noonan had said. She said the Tánaiste had distinguished between the certainty of having access to the European Stability Mechanism if the referendum was passed, and the unknown consequences of a No vote.

Launching Labour’s poster campaign, Mr Gilmore rejected suggestions the report gave credence to the No side’s claim of alternative funding in the event of a No vote.

“While you may be able to apply to the IMF, you don’t know what they are going to provide to you and on what terms. So it would be a very risky prospect to reject the treaty and cut off the possibility of access to the ESM,” he said.

On Sunday, Mr Noonan said the IMF was not in a position to give unilateral assistance to EU countries, outside the current troika arrangement also involving the European Commission and the European Central Bank. It only became involved when Europe took the lead, he said.

Spokespeople for the IMF were unavailable for comment yesterday. On Sunday, the fund said its spokesman’s comments had been “misinterpreted”. It said he had been referring to lending applications in general and not to Ireland or any other country specifically. Yesterday, the Sunday Times said it stood over its story.

Separately, Taoiseach Enda Kenny has said next month’s referendum will be “the most important vote that people will make for a very long time”.

On access to emergency funding, he said: “The treaty is very clear on this because it says that countries that ratify the treaty will have access to the European Stability Mechanism. We hope never to have to use it, but it’s very important that it be there.”