Debt relief deadline slips as Noonan warns against rush

THE PROSPECT of Ireland securing a deal in October on banking debt relief has receded after Minister for Finance Michael Noonan said it was in Dublin’s interests not to rush agreement.

Rather than rush to meet the late October deadline set by EU economics commissioner Olli Rehn, Mr Noonan suggested Ireland could get better terms on easing its multibillion debt by waiting until Spain secured assistance for its banks.

“We understand that it might be in the Irish interest if the timeline were extended somewhat,” Mr Noonan said in Paris after meeting his French counterpart Pierre Moscovici.

“It would be ironic if we agreed to something before the end of October and a more advantageous arrangement was available later, after arrangements with Spain have been concluded.”

In June, as part of an agreement on support for Spanish banks, EU leaders pledged to look at ways to “further improve the sustainability” of the Irish programme terms.

Mr Noonan said his talks, continuing in Rome this morning ahead of a finance minister meeting in Cyprus, was to follow up on recent technical talks and present Irish ideas to reduce its banking debt.

“In this round of visits, we are briefing in detail of what the Irish ask is, to evaluate the possibility of delivering the ask and wondering how the ask needs to be modified,” Mr Noonan said in Berlin. “It would be totally foolish to make any predictions of how successful any particular formula will be or what timeline should be. We are going to keep asking.”

Asked whether it was important to have an accord in place before the budget in early December, Mr Noonan said: “Obviously there are issues that would come across the organisation of the budget. It’s something that we would like, but it’s not vital. It doesn’t really change the budget arithmetic.”

Despite IMF support for an Irish bank debt deal, German finance minister Wolfgang Schäuble is wary of anything that might be perceived by markets as a second bailout. The ECB, meanwhile, remains sceptical about any recasting of the €47 billion Anglo Irish Bank promissory note scheme, a key Government objective.

“It is an open secret that the Irish position and the ECB position aren’t totally aligned, but technical work continues,” said Mr Noonan.