Worst of crisis over, says Varadkar

THE worst of the economic crisis is over Transport Minister Leo Varadkar claimed last night.

In comments reminiscent of the then Fianna Fáil’s repeated — and wrong — insistence that the country had “turned the corner”, Mr Varadkar said there was now “light at the end of the tunnel”.

However, his comments came as the US teetered on the brink of debt default as President Barack Obama and congressional Republican leaders failed to agree a deal in order to avert what the White House has warned could lead to economic catastrophe.

Mr Varadkar insisted the future for Ireland was bright and the new EU bailout deal for Greece with its deep interest rate cut for Dublin had made a huge difference to the country’s prospects.

“For the first time in three years I’m starting to see the light at the end of the tunnel. The economy will return to growth this year, all be it very slow growth. And the cost of the bank bailout appears to be falling.

“Instead of getting worse every month, we are starting to see things bottom out or even get a bit better.

“Things are actually going in the right direction for us,” the minister told RTÉ.

Mr Varadkar denied the EU deal now placed Ireland’s low corporation tax at risk because Taoiseach Enda Kenny had agreed to a review of business levies as part of the deal.

Mr Varadkar is taking a major political gamble with his upbeat talk on the recovery as former Fianna Fáil finance minister Brian Lenihan was widely criticised by Fine Gael and Labour for insisting the worst of the economic slump was over on a number of occasions, only for the situation to then deteriorate further.

Mr Varadkar said the mainly state-owned Bank of Ireland may get private investment in the coming months which would further ease pressure on the Exchequer.

The positive message came as Britain agreed to cut its emergency bail-out loans to Ireland in line with the eurozone move which means the State will have an extra €1 billion to divert to other areas of spending from 2012 — but it will not be in time to avoid another savage €4bn cut and tax budget this december.

With America set to hit its $14.3 trillion (CORR) debt ceiling on August 2, President Obama is desperately trying to persuade Republicans to vote to allow further borrowing or the US will effectively default.

Republicans are refusing to agree to tax rises on the rich as part of a major slash in federal funding proposed by the president.

The stand-off is causing major global concern, with British business secretary Vince Cable branding the Republicans a “bunch of right wing nutters”.