No proposal from Greeks for debt conference, Noonan tells Dáil

Minister for Finance Michael Noonan has rejected claims that Ireland's bank debt is unsustainable. He also dismissed suggestions of a "lack of solidarity among (EU) member states".

And he expects economic activity or GDP to return to celtic tiger levels but said it would be more stable than previously.

Speaking in the Dáil during a private member’s debate calling for an international debt conference, the Minister said the new Greek government had not asked for a debt conference.

“I have come across no proposal from the new government that a debt conference should be put in place,” he told the House. “They have said they won’t negotiate with the troika but they seem to be negotiating with the institutions, effectively the ECB and the Commission and they’re silent on the IMF.”

The Minister said he wished Greece well and that they had suffered more than Ireland.

Referring to Ireland, Mr Noonan said “the level of GDP in Ireland will likely return to its pre-crisis peak. However it will be more balanced than during the bubble years, not relying too heavily on any one particular sector.”

He said the State’s debt-to-GDP ratio peaked in 2013 at 123 per cent and fell to an estimated 110 per cent last year.

But he said net debt amount to around 90 per cent of GDP last year, “which is close to the European average”.

This, he added, would reduce more when the banks were sold and he was confidence they would recover “at a minimum the €18 billion that this Government invested and up to the €30 billion invested in the pillar banks and PTSB.”

In a swipe at the former government Mr Noonan said everyone was blaming the banks for Ireland’s predicament but he said Fianna Fail was responsible.

Rejecting suggestions of a lack of solidarity from other member states, Mr Noonan insisted Ireland’s European colleagues provided the “necessary support” for the Government to make the State’s debt “more affordable and minimising its impact on the economy”.

Introducing the motion calling for a debt conference Independent TD Catherine Murphy said however the demand by the Greek people for a debt conference “should and must be taken seriously, not least because of its democratic legitimacy, but also because it is essential for the future of Europe”.

She said “it should be seen and supported by Ireland as a helpful and hopeful initiative”.

Ms Murphy said many Irish citizens identified the hopes and expectations of the new Greek prime minister.

But she said “it is not a narrative that has been articulated by our leaders. The message instead has been about the Irish miracle, with decreasing unemployment rates, good rates of growth and healthy export figures”.

She said the other side of the story was never expressed. “The level of emigration is a running sore. The real rates of unemployment, when JobBridge, zero hours contracts and underemployment are considered is much higher than the stated figures.”

Ms Murphy added that levels of disposable income after all taxes, direct and indirect, are considered, with poor corresponding public services, were never spoken about at European level.

Fianna Fail finance spokesman Michael McGrath expressed disappointment that the Minister’s replies indicated no plans for a debt conference.”Nor does he intend to put it in the agenda himself notwithstanding his signal at one stage that he was reasonably disposed to the idea.”

He believed one of the reasons for not calling a conference was a fear of causing market instability at a time when the cost of borrowing for Ireland and other countries had reduced substantially.

“However, it could be done in a managed way with the express aim of achieving an outcome that is fair to both debtor and creditor countries. Ireland’s direct need from a debt conference or any other form of talks that take place would be very different to that of Greece.”

Mr McGrath added that “Ireland should pledge itself to assist Greece, in a spirit of European solidarity. Greece needs something akin to the Marshall aid plan which the US extended to Europe after the Second World war and from which Ireland benefitted.”