Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Dublin: 13°C Sunday 14 August 2022

"The purpose of the programme was actually to exit the programme" - Noonan

The Finance Minster says that Ireland’s decision not to take a post-bailout credit line was because this was a “benign” time. The Troika say Ireland is in a “strong position”.

FINANCE MINISTER MICHAEL Noonan says that the Government took the decision to exit the bailout programme without a precautionary credit line because the “time was now right”.

Speaking to media in Brussels this afternoon, Noonan said that the decision was taken in large part because the Government felt that this was a “benign” time for the European economy:

If we took a precautionary line now, we would have to take the same decision that we did today next November and I’ve no guarantee conditions will be as benign next year as they will be today.

He continued:

It can get rocky at times in Europe and things over which one has no control elsewhere in the eurozone can affect one’s decision, but its a very good time now because as I say there’s a benign window of opportunity.

(Youtube/Hugh O’Connell)

Noonan said that Ireland has built up cash reserves of over €20 billion which will fund the country into 2015 and if Ireland were to take on a credit line now it would be apparent that “we would not need to access it in 2014.”

He said that it is the intention to see Ireland make a return to the bond markets in “late January or early February.”

“The purpose of the programme and the 260 actions we took over three years was actually to exit the programme, ” he said. “Meaning that the purpose was to restore Ireland to normalcy so that we would be a normal Eurozone county making our decision in Government and funding ourselves on the markets.

The Troika

Two of our three troika partners have responded Ireland’s decision this afternoon, welcoming it as a step forward for the country.

Speaking this afternoon European Commission (EC) vice-president Ollie Rehn sounded a positive note, saing  that, “In short, today is a good day for Ireland and the Irish people.”

He said that he was informed of the decision by Finance Minister Michael Noonan this morning.

Making a difference

A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article.

Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

For the price of one cup of coffee each week you can make sure we can keep reliable, meaningful news open to everyone regardless of their ability to pay.

imageEU commission VP Olli Rehn, left, speaks with Spanish Minister Luis de Guindos at meeting of eurogroup finance ministers  in Brussel today. Pic: (AP Photo/Virginia Mayo)

Rehn said that the decision was Ireland’s alone to take and that whatever decision the Irish Government made it would have been supported by the EC.

He added that: “while challenges remain Ireland has made impressive progress and is well placed to make a successful and durable programme exit”:

Graduation from the programme will send a very clear signal to markets and international lenders that the adjustment effort undertaken in Ireland, with the support of its European and international partners, has paid off.

The Irish Government’s decision has also been noted by the IMF, with managing director Christine Lagarde saying that “Ireland is in a strong position”. “Irish authorities have established a very strong track record of policy implementation,” she said in a statement today. “This bodes well as Ireland exits its EU/IMF-supported program”:

Although uncertainties remain in Europe and the global economy more broadly, Ireland is in a strong position in terms of its bond yields and has built a sizable cash buffer. We look forward to continuing to work with the authorities as they address the challenges that remain.

Read: 5 reasons why the government decided to exit the bailout and go it alone >

Read: ‘This is the right decision for Ireland’: Taoiseach confirms bailout exit without credit line >

About the author:

Rónán Duffy

Read next: