MEMORANDUM OF UNDERSTANDING:THE MEMORANDUM of understanding giving legal status to the €85 billion rescue package agreed with the EU and International Monetary Fund is unlikely to be published before the budget, according to a source.
The source, who is familiar with ongoing negotiations on the Government side, indicated that the document has not yet been finalised but said a draft of the memorandum may be published this week.
The move, which would be done by means of laying the document before the Dáil, would be subject to Cabinet approval, possibly at today’s meeting of Ministers.
The memorandum sets out the conditions the Government must meet at the end of each quarter in order to draw down tranches of the loan. The document is close to being finalised, said the source, but some details were still under discussion.
It is understood the memorandum will be formally approved by the board of the IMF in Washington on December 10th, some three days after the budget.
The document is believed to run to between 15 and 20 pages. It contains policy, fiscal and banking conditions that are very detailed for 2011. For next year, it sets out specific targets to be met by the time each quarterly review takes place. The conditions are less specific for succeeding years of the three-year programme.
Fine Gael’s enterprise spokesman Leo Varadkar said yesterday it was unacceptable that the memorandum would not be published until after budget day.
He said if that happened, the Opposition would be debating the budget without knowing the details of the four-year plan.
“At this stage it looks likely it will not be laid before the Oireachtas until January, which is far too late,” he said.
Labour deputy Pat Rabbitte said it was “outrageous” that the Opposition and public would not have sight of the memorandum until after budget day.
The two main Opposition parties yesterday contended that the growth projections of 1.75 per cent for 2011 contained in last Wednesday’s four-year plan were misleading. Fine Gael and Labour said the European Commission’s projections of 0.9 per cent growth made a mockery of the plan.
Fine Gael finance spokesman Michael Noonan said that a “soft figure” for growth was included in a plan published only five days ago. “I am not going to say that they deliberately included a false figure. They should have been more careful when the Opposition told them that the figure was too optimistic,” said Mr Noonan.
Mr Rabbitte said it was difficult to understand the choreography that led to such a huge reduction in growth within a week.
“We have at least €1 billion additional interest already built into a four-year plan that’s not even a week old.
“The commission is now saying that the growth projections were too hopeful.
“This is an absolute nightmare for the country in the sense that our hope is of scaling the mountain of debt rests entirely on getting growth back that will generate positive employment,” said Mr Rabbitte.
However, the Department of Finance said that the commission’s estimates for growth have tended to differ from those of the Government’s.
“That is why the commission extended the target [by which the deficit falls to 3 per cent of national income] to 2015. It said that if Ireland does not have the growth that is projected, we will be given an extra year,” said a spokesman.
A senior Government Minister has sharply criticised the Labour Party for “talking down the economy”.
Minister for Transport Noel Dempsey said that it beggared belief that senior figures in the party had described the country as “banjaxed” and “an economic corpse”.