TROIKA REVIEW: THE GOVERNMENT has signalled significant progress with the troika on the key issues of the Anglo Irish Bank promissory notes as well as the sale of State assets.
Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin have also said that Ireland has met all its targets so far in the bailout programme, some 90 in all, by a “significant margin”.
They were speaking at a press conference yesterday following the conclusion of the latest review of the four-year €85 billion programme by the EU Commission, the European Central Bank and the International Monetary Fund.
Mr Noonan said considerable progress had been made on the issue of reducing the high interest rate on the €30 billion promissory note issued to Anglo Irish Bank. At present, the interest bill for repayment will be €16.8 billion over 20 years, and the Government had been lobbying since last autumn for more “sustainable” terms.
The Minister said that discussions had taken place with officials from the European Commission, the ECB and the IMF and a common position had been arrived at that might be to Ireland’s advantage. He said a position paper would be prepared by the troika on the promissory note, which would be ready by the end of February. He said it would then require political approval from the 27 EU leaders.
“We are working on an alternative to the promissory note that would reduce the costs to Ireland and make it clear to everybody that Ireland is in a position to pay sustainable debt,” he said. “I am not saying we have been successful by any manner or means.
“Rather than the proposition being an Irish Government proposal, it will move to being a proposal coming from senior people representing the troika.”
Mr Howlin also said considerable progress had been made with regard to State assets. He said the troika had moved from a position where it initially opposed any of the funds from the sale of State assets being used for job creation to a position where it agreed that a portion could be used.
Mr Howlin would not be drawn on which State assets had been identified for sale or if the estimated amount would exceed the €2 billion agreed in the programme for government. Nor would he say what portion of the proceeds would be reserved for job-stimulus purposes.
Mr Noonan said the fiscal consolidation targets had been met by a significant margin.
He added that a number of conditions in the memorandum of understanding had been pushed back until later in 2012.
The Fiscal Responsibility Bill, due by the end of March, would now be published by late June. That, he said, was because it would not be prudent to proceed with legislation that was dependent on the fiscal compact, which has yet to be agreed at European level.
He also said he would prefer the compact to be approved by primary legislation at parliamentary level, rather than by a constitutional referendum.
While accepting that “deteriorating external conditions” posed risks in 2012, Mr Noonan said the December exchequer figures were stronger than anticipated and there was “a bit of the buffer” in the projections for this year.
Referring to the Government’s growth projection of 2.5 per cent, he said there was “no reason to resile from that figure at present”.
The reform of personal insolvency legislation had also been delayed until the end of April. He denied there was any conflict between him and Minister for Justice Alan Shatter on the Bill. The new law had been agreed in principle but it was a very technical and complex piece of legislation.
Asked would domestic mortgage debt be included, in addition to the more general reform of bankruptcy laws, he said anybody who had a debt would be in a position to follow a judicial route.
Mr Howlin said: “We have good allies in the troika now in ensuring economic progress will be achieved.”
He said there were sensitivities around the remaining €5 billion in the National Pension Reserve Fund.
He said in some sense the troika regarded the money as “collateral” for their loans, indicating it may be locked during the four years of the bailout.