Credit line for bailout exit ‘likely’

The Government will more than likely agree some sort of precautionary credit line prior to exiting the EU/IMF bailout programme in December, according to two of the big credit ratings agencies.

In separate interviews with the Wall Street Journal, Kristin Lindow, a senior vice president at Moody’s, said Ireland was in a position to go it alone, although it would be more prudent to negotiate some sort of backstop.

“The Government could choose to go it alone and not have a credit line and that would probably work out just fine. But since the world is an uncertain place and because the Government is reasonably cautious I do not expect them to do that.

“They are coming out of a period which was quite traumatic. I do not think they are particularly risk takers.” A credit line would be “a practical and very inexpensive way” to boost investor confidence, she said.

Moody’s is relatively optimistic about the prospects for the Irish economy and forecasts a growth rate of 2.3% next year.

“From our perspective, we expect an underlying dynamism in the Irish economy which can cause growth to strengthen.”

Also speaking to the Wall Street Journal, Gergely Kiss, a primary analyst for Ireland at Fitch, said he expects the Government to put in place some sort of a credit line before December.

He said the biggest determinant of Ireland’s continued credit worthiness is its commitment to restore fiscal rectitude.