Noonan links bailout emergence to bank debt

THE MINISTER for Finance has linked a deal on Ireland’s bank debt and the State’s emergence from the bailout programme.

Michael Noonan said the International Monetary Fund would have to assess the sustainability of Ireland’s fiscal position when it is emerging from the bailout programme.

The IMF conducts ongoing debt-sustainability analyses for countries in its programmes. By the end of this year, it will begin to examine Ireland’s ability to emerge from its funding programme at the end of 2013, as envisaged.

Mr Noonan told a conference in Dublin yesterday on the Irish economy, organised by Bloomberg, that the IMF was “totally on our side” in relation to getting a deal on Ireland’s €30 billion Anglo Irish Bank promissory notes and the European Commission was “working in the background” on a solution.

The European Central Bank was the “tough nut to crack”, he said.

However, he said the bank’s interests and Ireland’s coincided up to a point and there were alternatives to re-engineering the promissory notes.

There was an awareness “at all levels” in Europe that there was a legacy issue in Ireland in relation to how the banks were recapitalised and that Ireland had played a role in protecting other European banks from a contagion effect.