Noonan rules out second bailout


Minister for Finance Michael Noonan said he is hopeful the State will be back in the bond markets "in some small way" by end of 2012 despite an apparent suggestion to the contrary by Minister for Transport Leo Varadkar.

Speaking at a meeting of the Mid West Society of Chartered Accountants in Limerick today, Mr Noonan said categorically there will be “absolutely” no second bailout for Ireland next year.

He said the Government would continue to act in accordance with the advice from the National Treasury Management Agency. Mr Noonan was reacting to comments made by Mr Varadkar, who speculated the State may need a second bailout next year.

Mr Varadkar also said over the weekend he believed it was unlikely Ireland would be back in the bond markets next year.

During a briefing to reporters in recent weeks, Mr Varadkar said when planning departmental spending for 2012 that he operated under the assumption it was unlikely the State could go back to the international markets next year.

However, his spokesman yesterday insisted Mr Varadkar had been speaking about a “hypothetical” situation in response to a query about available funding for transport projects.

Mr Noonan said today the main issue Mr Varadkar raised was whether Ireland would be going back into the money markets or not next year. He noted the EU-IMF the programme is due to run until the start of 2014.

"There is sufficient money in the programme to meet all eventualities so categorically there will be absolutely no bailout next year in Ireland,” Mr Noonan said.

"The programme has its schedule that we would be going back in a tentative way, into the markets, at the end of 2012," he said. "We are hopeful that we will be in the markets in a small way by the end of 2012, but obviously the main funding for Ireland will be coming from the IMF and the European Union until the end of 2013.

“The advice on that will come from the NTMA depending on circumstances and that is still the Government’s policy to get back into the markets in 2012. There is stuff happening every week, and we will have a better idea of how Europe is shaping to deal overall with the crisis after they resolve the Greek situation on June 23rd at their meeting in Luxembourg,” Mr Noonan said.

The Minister said he did not think his Government colleague should be reprimanded for his remarks, which he said were “reasonable” in the context of seeking funding for infrastructural projects.

“I think what he said was reasonable in that in his department if you’re looking for public private partnerships to put in transport infrastructure, that it would be hard to get private sector money when Ireland is not in the markets. I think that’s a reasonable position, and I think that’s the point he was trying to make rather than talking about the bailout in general,” he said.

But Fianna Fáil’s Michael McGrath insisted this morning it was “crystal clear” that Mr Varadkar was expressing the view that he did not believe Ireland would not be returning to the bond market next year and that a second bailout deal would be required. “That represents a very fundamental shift in policy if it does, indeed, represent the Government view,” he told RTÉ radio.

Mr McGrath, who is his party’s spokesman on public spending and financial reform, said Mr Varadkar’s intervention was unhelpful and would lead to “further confusion”.

Central Bank governor Patrick Honohan said today the country must stick with the EU-IMF deal if it is to return to the markets. But he would not be drawn on whether Mr Varadkar’s comments were damaging for the country.

“It’s always very hard to tell how statements will be interpreted,” he told reporters at the launch of the Central Bank’s annual report. “I think the nervous international environment is undoubtedly affecting confidence about Ireland and other countries that have stressed financial situations. There’s no doubt about that.”

Tánaiste and Minister for Foreign Affairs Eamon Gilmore yesterday said the Government was going to honour the terms of the agreement struck between the previous administration and the EU, ECB and IMF. “We are not going to unilaterally default on that agreement. We are going to honour our commitments,” he told RTÉ Radio One’s This Week programme.