THE FINANCE MINISTER Michael Noonan has insisted that Ireland has enough access to cash to see it through to the middle of 2013 at the very earliest – and will not require extra financial assistance from the EU or IMF.
Speaking in the Dáil this afternoon, Noonan insisted that the ‘worst case scenario’ would see Ireland’s reserves run out by the middle of 2013, but that economic forecasts meant the interest rate of market borrowing would be sustainable by that time.
Ireland’s current €85bn bailout package would be enough to see Ireland make it “into the second half of 2013″, Noonan said, adding that such estimates were ‘prudent’.
More “benign” estimates produced by the Department of Finance suggested that Ireland could easily survive until the end of that year before needing to go back to the markets.
Pressed by Sinn Féin’s finance spokesman Pearse Doherty, Noonan indicated that Ireland would return to the money markets as soon as the market rates were lower than those being charged under the bailout, currently at 5.83 per cent.
Fianna Fáil’s public expenditure spokesman Michael McGrath insisted that current projections for the Irish budget deficit and the costs of recapitalising the banks – along with an outstanding bond issue which must be refinanced in early 2013 – meant Ireland would run out of cash earlier.
That rate, currently at 5.83 per cent, is the target of a government campaign to be lowered – a cause Noonan said had been backed by the acting IMF managing director John Lipsky, and also by the OECD.
A defiant Noonan insisted that Ireland could continue to seek a reduction in its interest rate, which he said could save €148m per year if reduced by 0.6 per cent, or just over €200m if reduced by a full percentage point.
There would be no concession on the corporate tax rate in order to secure such a reduction, however.
“There is no way that I’m going to negotiate with the French government to concede anything”, Noonan said, describing the corporate tax rate as the “heart and soul” of Ireland’s economic policy.
“I’m not going to be waltzed around by any member state, especially when the gain is so small.”
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