THE GOVERNMENT and European Commission have separately criticised predictions that Ireland may need a second bailout to guarantee continuity of funding.
A spokesman for EU economics commissioner Olli Rehn said that it was “not particularly helpful” to fuel speculation that Ireland may require a second bailout.
He was responding to a question about comments by Citigroup chief economist Willem Buiter who said yesterday that Ireland should consider a second stand-by bailout programme in advance of a last minute application.
“What is important and essential in the case of Ireland is to ensure the continuation of the good job done by the Irish authorities in the full implementation of the programme,” said the commissioner’s spokesman in Brussels.
The sentiment was echoed by Minister of State for Finance Brian Hayes who said that Ireland was in the middle of a programme with the troika that was achieving everything it had set out to achieve.
“Our focus in the programme is to get Ireland back to the markets as quickly as possible. This speculation is neither helpful nor productive,” said Mr Hayes.
He pointed out that the notional cost of borrowing by the State had fallen from 14.5 per cent to 8 per cent over the past five months and Ireland was regaining its reputation abroad. He said the intention remained to re-enter the market in 2013.
Fianna Fáil’s spokesman on finance Michael McGrath agreed that the speculation was premature and said the National Treasury Management Agency (NTMA) had given assurances of sufficient funding to the end of 2013.
He did add, however, that he agreed with Mr Buiter that Ireland needs to begin preparing for the funding position early and not have to arrange funding in a panic. There is a €12 billion bond due in January 2014. Mr McGrath said arrangements for funding this should begin early next year.
Sinn Féin leader Gerry Adams said it was clear that there was going to be another bailout and it would be followed by several other bailouts.
“We are going to be in hock for generations and it’s going to have to stop,” said Mr Adams.
Richard Boyd Barrett, finance spokesman of the United Left Alliance, said a second bailout was inevitable and he called for Ireland to break what he said was the “death grip” of debt and austerity imposed by outside international agencies.
It came as senior officials from the EU Commission, IMF and ECB (including its head of delegation Klaus Masuch) met Department of Finance general secretary Kevin Cardiff, and officials from Nama and the NTMA in Merrion Street yesterday.
The troika is conducting its fifth evaluation of Ireland’s implementation of the bailout programme.
The Government has expressed confidence it will meet the targets set out for the last quarter of 2011. It has pointed out, for example, that Ireland’s debt to GDP ratio is significantly ahead of what’s required.
One of the issues that will be discussed is legislation on personal insolvency, which must be published by the end of March.
The spokeswoman for Minister for Justice Alan Shatter said the heads of the Bill will be published this month. Ireland’s bankruptcy law has been criticised for being antiquated, although last year new legislation reduced the period of bankruptcy from 12 years to five years, if preference creditors had been paid. By contrast, the period of bankruptcy in the UK is only one year.
In 2010, there were only 29 adjudications of bankruptcy in the State compared to 1,400 in Northern Ireland. The figures were lower in previous years, with only six people being declared bankrupt in the State in 2006.