Gilmore confident of 'timely' deal
Tánaiste Eamon Gilmore has said he is very confident of securing a “timely” deal on Ireland’s bank debt with European partners, allowing Ireland to exit its EU-ECB-IMF programme next year as planned.
After talks in Berlin with German foreign minister Guido Westerwelle this morning, Mr Gilmore said Berlin understood that programme success and bank debt were interlinked, and said Germany would co-operate with Ireland on improving the sustainability of its programme.
“We’re in the business of exiting the programme not entering a new one,” said Mr Gilmore, expressing his appreciation for Berlin's support in improving the sustainability of Ireland’s programme.
“The troika is clearly focused on how Ireland gets out of the programme; to do that we have to resolve the issue of the bank debt,” he said. “I’m confident that we can exit the programme and I’m confident that we can get a timely deal on bank debt.”
German foreign minister Guido Westerwelle declined to comment on remarks this morning by a member of Chancellor Merkel’s Christian Democratic Union (CDU) that any bank deal drawing on funds from the ESM bailout fund would require a second programme and new conditions.
“I cannot make comments on every single remark from members of our parliament,” he said.
Mr Westerwelle said yesterday’s positive troika report and improving market sentiment were a tribute to the “decisiveness with which the Irish confronted the crisis”.
“The Irish example shows that our common efforts were worth it and it is clear that Ireland is an example for how, with hard work discipline and effort, a country can return to the path of success, and faster than many expected,” he said, saying Ireland’s programme had “yielded fruit faster than many thought”.
Neither minister would elaborate on a statement by Taoiseach Enda Kenny and Chancellor Angela Merkel on Sunday that the “unique circumstances” of Ireland’s economic crisis require a special approach.
Mr Kenny will have further talks with Dr Merkel in Berlin next Thursday.
This afternoon the Labour leader meets Mr Peer Steinbrück, the Social Democrat (SPD) challenger to Chancellor Merkel in next year's German general election. The two will hold talks and attend a conference at the SPD-associated Friedrich Ebert Foundation.
Mr Norbert Barthle, CDU head of the Bundestag budgetary affair committee, reiterated that any future ESM assistance for Irish bank debt would come with a full-blown programme.
“It is possible to use ESM for recapitalisation of banks, I think it will be possible but it necessary is that country asks for help. That help will be combined with conditionality. these are the trules of the ESM,” he told RTÉ.
He said it was unlikely that Ireland’s current programme, negotiated under the temporary EFSF fund, could be transferred into the new, permanent ESM fund. Any new assistance would require a new programme with new conditionality.
Meanwhile a leading ECB official has insisted that tapping the ESM would not automatically trigger the bank’s new bond-buying programme.
A bailout application is "a necessary, but not a sufficient condition for us to become active”, according to ECB executive board member Jörg Asmussen today.
"The ECB council independently decides in each case to what extent and for how long an intervention on monetary policy grounds is necessary,” he said, explaining the workings of the Outright Monetary Transactions (OMT) system.
His remarks were directed at German concerns that the programme would effectively see the ECB print money, under political pressure. "The printing press isn't being fired up," he said. "It's not about monetising debt, as some commentators have claimed. The money that's injected into the market with the purchases will be removed again from a different place."