Noonan insists ESM money for banks still possible

Minister is not concerned as he feels Schäuble ‘left door open’ for funding to be used

Minister for Finance Michael Noonan and the Minister for Public Expenditure and Reform Brendan Howlin with presenter Sean O’Rourke in the RTE Radio studio to answer listeners questions. Photograph: Eric Luke/The Irish Times

Minister for Finance Michael Noonan and the Minister for Public Expenditure and Reform Brendan Howlin with presenter Sean O’Rourke in the RTE Radio studio to answer listeners questions. Photograph: Eric Luke/The Irish Times

Wed, Oct 16, 2013, 12:49

Minister for Finance Michael Noonan has insisted the door has not been shut on the State’s hopes of the ESM providing funds to directly recapitalise the Irish banks.

German finance minister Wolfgang Schäuble yesterday said retroactive direct recapitalisation for Ireland was “not probable” and he did not “see any necessity” for such a measure as Ireland was doing very well.

Speaking on RTE Radio’s Today programme, Mr Noonan said he did not feel the door was closed as Mr Schäuble used the term “probable” and that he was playing to an audience as Germany sought to form a new government.

“I’m not [concerned] as I actually felt he left the door open,” he said. “To quote the phrase that he used it’s more keeping the door open than closing it...he used the word probable.”

Mr Noonan said the door had allegedly been closed on the State securing a deal on the Anglo Irish Bank promissory notes, Ireland getting lower interest rates on the bailout and on an extension on debt maturities but both had been achieved.

“He does a form of negotiation across the airwaves and I’m not sure which audience he was talking to yesterday but he was not talking to the Irish. He was talking to the prospective partners in government.”

The Minister was not prepared to say recapitalisation would happen but said he would be “negotiating on all fronts to get a reduction on the debt level in Ireland.”

He said the State would reduce its debt level from 124 per cent of GDP to 114 per cent by 2016 and that sales of bank preference shares would help further.

“We still in a position to negotiate support from Europe so our debt can move down towards the European average.”

Mr Noonan and Minister for Public Expenditure Brendan Howlin were appearing on the programme to discuss yesterday’s budget.

Changes to discretionary medical card criteria have frequently been alleged in recent weeks but Mr Howlin said this was not the case. He said people should not lose cards unless their income was well in excess of guidelines governing the area.

One caller, Stella, said she had two sons with cerebral palsy and other needs and that both had lost their entitlements since September after having a medical card for many years.

She said she worked part time, her husband worked full time and that the family was completely dependent on the card. She said she felt let down by the Government.

Mr Howlin said he did not know the family’s circumstances but that there had “genuinely” been no change to eligibility criteria. The caller said the only change had been her family’s income had been reduced.

Mr Howlin said the Government had to ensure the €2 billion annual spend on medical cards went to people who needed them and that he believed the caller’s sons should be entitled to one on medical grounds alone.

The Ministers defended a decision to cut jobseekers allowance for young people, with Mr Howlin saying it was a deliberate policy not to allow people to migrate from school on to the dole as happened in the 1980s.

He said a claim that a young jobseekers had been told by a social welfare official to move to Canada was likely a case of someone answering a question and trying to be helpful.

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