Absence of emergency credit a ‘risky gamble’

The Coalition decision not to put in place an emergency credit line was deemed a “risky gamble” amid questions over the terms and conditions that might apply to a second bailout.

Opposition TDs also claimed the Government was “bounced” into having to go it alone and exit the bailout programme without any financial back-up plan.

Fianna Fáil questioned the decision, warning that the Government was predicting only 2% growth next year, and that Irish banks were still in a risky position. Furthermore, international developments could overtake any situation at home, the party said, pointing out that the French economy was contracting and German growth was slowing.

Party leader Micheál Martin said the case needed to be justified for not opting for a credit line.

Amid howls in the Dáil that his party when in power had “dragged the country into the mud”, Mr Martin stressed that no document or report had been presented which showed why the Cabinet had made its decision.

He argued that conditional credit could potentially have reduced the cost of borrowing funds in the long run. “It is not that we might crash into somebody, but somebody else might crash into us.”

Jobs spokesman Dara Calleary said it was a “risky gamble” and asked if a deal was in place with German bankers to set up operations here to finance businesses.

Despite coalition claims the deal was not rushed and was timely, Sinn Féin leader Gerry Adams asked if the Government was “bounced” into the decision. He reminded coalition TDs that even with the troika going, communities faced severe budget cuts next year.

“You have taxed and cut the most vulnerable in Irish society, unbidden by your European masters. Next year, whether the troika is here or not, you will take €2bn more from the economy in water charges, taxes and more cuts to health, education and other vital services.”

Independent Stephen Donnelly said the decision was a “bitter sweet” moment. Shane Ross asked why the Coalition would not reveal the terms EU and IMF lenders had put on the table for an emergency credit line: “How much would it have cost?”

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