GOVERNMENT MINISTERS remain adamant that the four-year fiscal plan and the budget on December 7th will avert the prospect of Ireland having to avail of any EU/International Monetary Fund bailout.
They have dismissed speculation in the international media about an imminent EU bailout, with one Minister describing the reports as “fiction”. The reaction of bond markets today will be crucial to the Irish position in advance of the meeting of euro zone finance ministers in Brussels tomorrow and Wednesday.
Campaigning in Donegal yesterday, Minister for Tourism, Culture and Sport Mary Hanafin was emphatic that the Government had not engaged in discussions with the EU authorities on a possible bailout. “There is no question of it,’’ she said.
Ms Hanafin, just back from the US where she attended a Global Irish Network forum, said the network was very concerned about stories that had no foundation. "They said that coverage in the Wall Street Journalhad been quite damaging to our reputation abroad. I met the head of the stock exchange and he is anxious to see what we can do to stabilise the financial message from Ireland.''
Minister for Justice Dermot Ahern also said there was no foundation to media reports that the country is close to availing of the bailout. "It is fiction because what we want to do is get on with the business of bringing forward the four-year plan," he told RTÉ's The Week in Politicslast night.
“We obviously have to ignore a lot of this speculation because it is only speculation. We have not applied. There are no negotiations going on. If there were, Government would be aware of it, and we are not aware of it,” said Mr Ahern. “There is nothing going on at the direction of Government in relation to this. I spoke to the Taoiseach this morning. I spoke with the Minister for Finance and absolutely nothing is taking place in respect of this,” he added.
Minister for Enterprise, Trade and Innovation Batt O’Keeffe insisted Ireland was not like Greece – it was funded until mid-2011 and was not discussing any bailout with the EU.
Labour leader Eamon Gilmore, also campaigning in Donegal yesterday, called on the Government to ensure Ireland retained its economic independence. “We fought hard for our independence, and we should not hand it away,’’ he said. “I would be very surprised if there were any behind-the-scene discussions between the Government and the European authorities on this.’’ He said he accepted Mr Cowen’s assurance that no such talks had taken place. “I think it is important that we, as a country, retain our economic independence and sovereignty.”
The European authorities are on standby as markets reopen today amid acute concern about the loss of investor confidence in Ireland. High-level officials held meetings about the Irish situation in Brussels yesterday. Further anxiety surrounds the position of the Irish banks and fear that the €45 billion bailout bill might be increased.
The Department of Finance reiterated the case last night that Ireland has not applied for external support and said the Government continues its work on the four-year recovery plan and the 2011 budget: ‘‘Ongoing contacts continue at official level with international colleagues in light of current market conditions.’’
Despite positive weekend comments by IMF managing director Dominique Strauss-Kahn, well-placed European sources acknowledged German worries about Ireland’s ability to survive. With Irish bond yields close to record levels as trading resumes this morning, Minister for Finance Brian Lenihan will provide a briefing to his euro zone counterparts when they take stock of the turmoil at a scheduled meeting in Brussels tomorrow night. A well-placed source said they stand ready to convene an ad hoc phone conference at any moment in the event of an upsurge in volatility.
The European Central Bank declined to comment yesterday on a Bloomberg report that policymakers pressed Ireland to apply to the euro zone rescue fund during a conference call last Friday.
Meanwhile, Portuguese foreign minister Luís Amado said at the weekend his country could be forced to leave the euro if a political consensus to deal with its financial crisis could not be found. Portugal has seen a sharp loss of investor confidence in tandem with the pressure of the bond markets on Ireland.
“The country needs a grand coalition that allows it to get through the current situation,” said Mr Amado.
The Socialist government in Portugal does not have a majority and requires backing by the Social Democrat opposition to get its austerity budget passed on November 24th.