EUROPEAN UNION MINISTERS have officially adopted new rules which could mean Ireland would be subject to bailout-style inspections of its financial progress for up to 20 years after the end of the bailout programme.
Ministers yesterday adopted the ‘two-pack’ measures, the most obvious impact of which will be the movement of Ireland’s annual Budget from December to October – as a result of new rules which will require countries to send their Budget for prior scrutiny by Brussels.
However, the changes will also have a more profound impact on countries which are currently in an EU-IMF bailout – and force them to remain under strict financial supervision, and regular inspections, for years afterwards.
Among the rules adopted by ministers yesterday, and which have now officially become EU law, is a clause that bailed-out countries like Ireland will be subject to inspection by visitors from the European Commission and European Central Bank teams until they have repaid three-quarters of their EU loans.
With ministers also granting a seven-year extension to the repayment dates of Ireland’s loans, Ireland is not likely to have passed this mark until around 2035 – meaning two decades of regular inspections by visiting inspectors, similar to those currently carried out by Troika teams.
Those inspections could then lead ministers from other EU countries to issue recommendations about how Ireland might act to avoid any further financial calamity – though the rules do not strictly require Ireland to follow any recommendations.
The frequency of the visits is also not discussed, and so the visits may not be as regular as those of the current Troika inspectors who come to Dublin every three months.
Ireland’s bailout programme is due to formally end later this year, when it empties the €67.5 billion fund put up by the European Commission, the European Central Bank, the International Monetary Fund, and the governments of the UK, Sweden and Denmark.
The Troika’s most recent visits to Ireland have focussed on measures that could ensure Ireland is able to borrow from the open markets, and not need further funding from backup sources like the Troika, when the bailout funds are fully drawn down.
Ireland has so far drawn down about €58 billion of its total package, including almost all of the funds from the IMF and the European Financial Stability Mechanism.
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