State 'won't require' second bailout

Taoiseach Enda Kenny has repeated his view that the State will not require a further EU-IMF bailout next year.

"We are in an IMF-EU bailout deal which lasts for two more years," he said.

The Government, he added, had negotiated down the cost of the deal and made changes in the amount that was estimated to be required. He told the Dáil this afternoon that changes had also been made relating to the minimum wage and the jobs initiative, which had been accepted by the troika.

He was replying to Fianna Fáil leader Micheal Martin who referred to recent statements by Ministers, including Minister for Transport Leo Varadkar’s comments on the likelihood of a second bailout.

Mr Martin said that one Minister had given an extensive media briefing about policy on low-paid workers without clearing it with the Taoiseach and the Cabinet.

That had set off days of briefing and counter-briefings, with nobody any the wiser about Government policy. That was unfortunate but not an isolated incident, he added.

In the past three weeks, the Taoiseach and Minister for Finance Michael Noonan had to deal with the fallout from comments by other Ministers, “because they got mixed-up, spoke, were taken out of context or simply got it wrong’’.

He knew, he said, that the Taoiseach’s preferred approach to Minister Varadar, and maybe other Ministers, might be to simply ignore what he said.

An analysis had shown that Mr Varadkar’s interview had been covered by more 2,200 different media outlets around the world so far. He accused Ministers of operating to the standards of Opposition, where all that mattered was the size of the headlines.

Mr Kenny and Mr Noonan were forced to make public statements to calm financial markets following Mr Varadkar’s intervention.

While the Taoiseach and Mr Noonan yesterday refused to be drawn into public criticism of Mr Varadkar, other Cabinet members privately expressed their anger at the remarks.

“This is typical of Leo, talking about things that have nothing to do with his portfolio. He . . . can’t go around giving interviews as if he was having a chat in a Dáil corridor,” said one Cabinet colleague

Another said that while Mr Varadkar had a reputation as one of the brightest in politics, he had shown poor judgment on several issues.

Colleagues conceded that the Minister’s words were open to interpretation. But they were still critical of him for straying outside his brief.

However Mr Varadkar's "backbone" was praised by one opposition TD. Stephen Donnelly, Independent TD for Wicklow, told RTÉ Radio this morning that the problem for Cabinet was not what Mr Varadkar had said but that he had said it "out loud."

"Leo has irritated some of his cabinet colleagues but certainly it's refreshing to hear some straight talk."

"The denial of the size of the problem and the insistence that we will continue to pay our debts and everybody else’s debts is beginning to feel a little bit like Fianna Fáil coming on the television and saying the IMF isn’t really here."

"The reality is, whether we need another bailout or not, most people now believe that we will and that we will not go back to the markets," he said.

Mr Donnelly said the markets would not lend Ireland any money "when we're paying off everyone else's debts."

"This is the great mistake, the great fallacy that Fianna Fáil based its disastrous policy on and unfortunately it seems to be the direction this Government is going in."

"Last week the Taoiseach stood up and said emphatically Ireland will pay its debts but of course what he’s not saying is that we will pay our debts but we’ll also pay everyone else’s debts. So much so that we will eventually lose our independence and ability to control our own policy," he said.

In an interview with a Sunday newspaper Mr Varadkar speculated on when Ireland might be able to return to borrowing on financial markets: “I think it’s very unlikely we’ll be able to go back next year. I think it might take a bit longer . . . 2013 is possible but who knows?”

The Minister added that it might mean an extension of the existing EU-IMF programme or a second initiative.

Taoiseach Enda Kenny moved quickly to limit the fallout from Mr Varadkar’s interview.

“People can have their views about the meaning of words, but let me clarify for you again: there will be no need for a second bailout for Ireland in 2012,” he said.