Noonan seeks debt revision 'time frame'
MINISTER FOR Finance Michael Noonan pressed for a speedy EU deal to revise Ireland’s bank rescue as he linked the question to an IMF review of the bailout later this year.
Mr Noonan said he hoped to receive clarity at a euro zone meeting last night over the timetable for the renegotiation of Ireland’s bank debt, but little further progress was expected.
“I think a time frame is the main progress we would make,” he told reporters as he arrived in Brussels for talks with his counterparts.
“People, as you know, are quite concerned about Spain and there’s a draft communique in circulation so the main decision-making process, and indeed tomorrow, will be about Spain.”
The Minister wants a deal on the banking debt later this year, and made a direct reference to the IMF when asked if he was angling for an agreement before the December budget.
“That would suit our domestic agenda and it would also suit the IMF time frame of having to adjudicate on whether we’re funded for 12 months ahead or not, and they’ll need to do that some time in the autumn,” he said.
The Government is half way through the bailout, but the plan obliges it to be back in debt markets late next year as rescue loans expire.
The likelihood of Dublin being able to do that will be assessed by the IMF after the summer. This is a crucial procedure under the IMF rules as it does not lend to countries judged to have an uncertain funding profile over a 12-month horizon.
Any such conclusion in respect of Ireland later this year could precipitate talks on a second bailout, something the Government and its European sponsors are keen to avoid.
The Minister’s remarks imply the IMF examination adds urgency to the EU’s review of the banking rescue. The review was sanctioned by euro zone leaders last month.
“As you know we don’t control the timeline and if you go back to the communique it said that everything has to be resolved by the end of the year,” Mr Noonan said.
“Any arrangement is dependent on a European banking supervisor – whether that’s one person or some kind of panel being put in place – but as soon as possible would be our preferred timeline.”
He added: “We’re not the only people who have a very strong interest in this.”
He declined to specify the debt cut he was targeting but said the Government would be “ambitious in our ask”.
Mr Noonan said the High Court judgment in the challenge to the European Stability Mechanism treaty by Independent TD Thomas Pringle was “satisfactory”.
Although Ms Justice Laffoy said Mr Pringle had raised a legal issue to be decided by the European Court of Justice, she refused to grant an injunction preventing the Government from ratifying the treaty.
“Several judgments of the ECJ have said that matters such as this which were entered in the challenge could only be adjudicated at European level, but she went on to say that she wouldn’t grant an injunction to prevent ratification while it was being heard in Europe,” Mr Noonan said.
“That’s the bit that was of greatest interest to us. So if it clears an appeal in the Supreme Court we can go ahead and ratify.”