Government wins vote over bailout

Overwhelming support for decision to exit bailout without precautionary credit line

Reform Alliance TD Lucinda Creighton warned there was a €600 million cost associated with maintaining high cash reserves in the NTMA.

Reform Alliance TD Lucinda Creighton warned there was a €600 million cost associated with maintaining high cash reserves in the NTMA.

 

The Government had an overwhelming 95 to 25 Dáil majority in support of its decision to exit the EU-IMF bailout without a precautionary credit line.

After a 5½-hour debate on the move to exit on December 15th, Sinn Féin supported the Government’s decision while Fianna Fáil was opposed because the Government opted against a credit line.

Reform Alliance members either abstained in the vote or opposed the decision, while a number of Independents abstained because they had not been allowed to introduce an amendment.

Reform Alliance TD Lucinda Creighton warned there was a €600 million cost associated with maintaining high cash reserves in the NTMA and that was about 12 times the estimated cost of a credit line.

People Before Profit TD Richard Boyd Barrett disputed the either/or option and described the debate as a “farce”.

Introducing the debate, Minister for Finance Michael Noonan said the decision to exit the “programme of financial support” showed Ireland had the confidence to “take control of the decisions that will determine our future as a State”.

Market confidence in Ireland is high and “we are over 95 per cent of the way towards meeting our target of reducing the deficit to less than 3 per cent by 2015.

During the bailout programme the State delivered more than 260 actions, underwent 12 quarterly reviews and by December 15th, will have received €67.5 billion in funds, Mr Noonan said.

After December there will be reviews by the EU and IMF every six months. “This has been a longstanding feature of IMF programmes and is now also a feature under the new EU governance rules.”

Mr Noonan echoed comments last week by the Taoiseach when he said this “is the right decision at the right time for Ireland”.


‘Insurance policy’
Fianna Fáil finance spokesman Michael McGrath said he very much welcomed the fact that Ireland was on course to exit the programme but he questioned whether it was the right decision not to have a credit line or “insurance policy” in place.

Mr McGrath said if the current benign market conditions prevailed then the Minister’s decision would have been the right one.

The Cork South-Central TD said his essential position was however that “we do not know the cost of what the insurance policy would be”.

He said Mr Noonan had not addressed this, “perhaps because he does not know what conditions would have applied” since Ireland had not formally applied for a credit line.

Sinn Féin finance spokesman Pearse Doherty said a precautionary credit line was exactly the same as a bailout – a €10 billion fund that would be made available by sources who would ask for it to be paid in full over time with interest.

He said the troika’s mindset remained in Government buildings. “Troika or no troika, this Government is pledged to continue to implement the policies of austerity.”

Mr Boyd Barrett described the debate as “bogus” and an “utter charade, a political trick played by a Government that specialises in pulling the wool over the people’s eyes”.

He said they were being asked to make the choice of “whether to stay in the frying pan of the troika’s austerity programme or jump into the fire of the international markets to become prey to the vultures, speculators and the bondholders who caused this mess in the first place”.