Kenny rejects idea of strict terms for loan

Taoiseach suggests emergency credit line need not be as ‘constraining’ as bailout

Italy’s prime minister Enrico Letta  with Taoiseach Enda Kenny  during a European Union leaders summit in Brussels last night. Photograph: Yves Herman/Reuters

Italy’s prime minister Enrico Letta with Taoiseach Enda Kenny during a European Union leaders summit in Brussels last night. Photograph: Yves Herman/Reuters

Fri, Oct 25, 2013, 01:02

Taoiseach Enda Kenny has signalled he will not accept fiscal policy conditions as stringent as those in Ireland’s EU/IMF programme as the price for an emergency credit line in the wake of the bailout.

The Government is stepping up talks with the troika on the terms of any such facility, with policy conditions a prime question to be settled.

Mr Kenny did not commit himself to any application for a precautionary loan programme, saying only that the Government was examining what its “best options” were.

However, the Taoiseach was clear in his response when asked if any insistence on very onerous conditions would be a deal-breaker for him.

“Clearly you wouldn’t want a situation where being imposed that were as – shall we say – constraining as the programme itself,” Mr Kenny said.

“So when we hope to exit now on the 15th of December we’ll consider all of the options, take the best advice we can, take the views of our colleagues and that we make that decision based on it being the most durable and sustainable option for Ireland. ”

He noted that Minister for Finance Michael Noonan will have talks next week in Washington with the IMF after discussions this week with the European Commission and the European Central Bank.

“The Government will consider all of that evidence and all that information before we make our decision,” he said as he arrived at last night’s EU summit. Mr Kenny cited a letter he sent on the eve of the summit to his 27 counterparts in which he urged them to come good on their pledge last year to break the link between bank and sovereign debt.

“We want to see that followed through because that presents another option for Ireland and indeed for other countries,” he said.

Asked if he was disappointed that the draft summit communiqué referred only to “national backstops” to deal with bank failures, Mr Kenny said a European mechanism was needed as well.

“It’s a case of Ireland and other countries very strongly supportive of a European option as well as national considerations,” he said.


Meeting with Merkel
Mr Kenny did not raise this question with German chancellor Angela Merkel at a meeting of the European People’s Party, the European affiliate of their respective parties.

“I congratulated her on her magnificent achievement in the election. I didn’t get a chance to go beyond that at the EPP meeting,” he said.

The Taoiseach said he would raise the corporate tax question with Dr Merkel if the opportunity arose and planned to discuss it anyway in his prepared remarks to his counterparts. He said: “People are very clear on Ireland’s position insofar as corporation tax rate is concerned.”

Ireland’s position had been endorsed very strongly by the Organisation for Economic Co-operation and Development, he added.