Hayes calls for debt reduction

 

Ireland would need to get a significant reduction in its debt burden in order to get any referendum on new European budgetary rules passed, Minister of State for Finance Brian Hayes has said.

"The idea that we could have a referendum without that agreement, on a substantial re-arranging of our debt, wouldn't fly," Mr Hayes said in an interview with the Sunday Business Post.

"We would have to have that in place before we put the question (to the people) and that's beginning to be understood at an EU level, which puts us in a stronger position," he said.

The Government has said it will wait until it has the final text of the European fiscal plans, probably early next year, before deciding whether it needs to hold a referendum to ratify the agreement.

The EU said on Friday that once nine euro zone countries have ratified the agreement, which binds members of the currency bloc into tighter fiscal rules, it will come into force, meaning the bloc would not need to wait for Irish ratification.

However, an Irish "no" vote would create problems for both Dublin and Brussels by cementing the idea of a two-speed Europe and raising questions over Ireland's commitment to the euro.

Even before the possibility of a referendum was raised, government officials had been trying to persuade creditors at the ECB, the EU and the IMF to reduce the burden of the country's debt by cutting the cost to the Government of bailing out its banks.

Ireland would potentially like to use changes agreed to the euro zone's rescue fund in July to refinance the cost of rescuing its banks, at the heart of its financial crisis.

The interest bill alone for bailing out Anglo Irish Bank and Irish Nationwide Building Society comes to €17 billion.

Lengthening the period to repay the €30 billion in promissory notes or IOUs used as a lifeline for Anglo and Irish Nationwide would help, Mr Hayes said.

"We're going to pay back our debts - that's a very important message. But we want a longer period of time to do it, to refloat the economy and to get growth of two to three per cent."

Meanwhile, support for Taoiseach Enda Kenny has dropped sharply following the budget, according to poll results in today's edition of The Sunday Times.

The poll shows support for Fine Gael down to 30 per cent, a drop of seven percentage points from the previous poll in October. Fine Gael remains, however, the most popular party.

Mr Kenny's own satisfaction ratings, which had kept rising since his election in February, plunged 14 percentage points from October to 44 per cent.

That leaves Sinn Féin leader Gerry Adams as Ireland's most popular party leader with a satisfaction rating of 48 per cent, down two points.

Overall, voter satisfaction with the government fell 10 points to 26 per cent. Some 69 per cent of voters said they were dissatisfied with how the government is running the country.

The Labour Party also saw its support drop by four percentage points to 11 per cent.

Fianna Fáil saw its ratings rise five points to 20 per cent, while Sinn Féin is the second most popular party with the poll showing an increase of two points to 21 per cent.

Independents rose two points to 15 per cent.

Reuters