THE LATEST plan to rescue euro zone economies is not a “good deal” for Greece, because it will leave the country mired in a bailout programme for at least another decade, Minister for Finance Michael Noonan said yesterday.
Mr Noonan also said the Republic had borne a “disproportionate” burden in efforts to protect the European banking system so far and reiterated calls for measures to lighten this.
The restructuring of promissory notes used to recapitalise Anglo Irish could lead to billions of euro in savings for the State, he said.
Speaking before an address to the Leinster Society of Chartered Accountants in Dublin, Mr Noonan noted that “the concentration” of this week’s talks was not on the Republic and thus this was not the time to raise the issue of the promissory notes.
Both he and Taoiseach Enda Kenny had repeatedly brought up the matter at the “bureaucracy” level of commissioners and senior bankers, he said.
“Ireland has for timing reasons carried a disproportionate amount of the protection of the euro banking system.
“ We want to reduce the burden of the debt. We can only do that in co-operation with our partners in Europe.”
Extending the term on the Anglo promissory notes from a “pretty harsh” 10 years to 30 years “would be a major advantage”.
This deal agreed by EU leaders overnight on Wednesday involves a 50 per cent writedown for the holders of Greek bonds, a measure which Mr Noonan said would see Greece in a bailout programme until 2027 under a worst-case scenario.
He could not countenance such a scheme in the Republic, which should be back in the markets by the second half of 2013.
“Could you imagine any of us in politics going to the Irish people and saying, stick with it lads, we’ve another 16 years of this?”
He was “happy” about the overall EU deal because it meant no more “moving by instalment” and it put growth on the agenda.
Removing the threat of recession would help the Republic to emerge from its difficulties through export-led growth: “The big win for Ireland is the fact that Europe will begin to grow again.”
He sought to distance the Republic from “Mediterranean-type” economies, saying the Irish model was “northern European”.
The Minister also welcomed the EU leaders’ €106 billion plan to recapitalise Europe’s banks, which he said would not necessitate further funds being pumped into Irish banks because they have already been recapitalised to a higher level.
He told the society the Government would “take whatever steps are necessary” in the budget to reduce the Republic’s deficit to 8.6 per cent of gross domestic product next year.
This will require extraction of at least €3.6 billion from the economy.
