Troika gone, but tight rein to be kept on spending

Ireland is free of the troika but not of austerity as the Government warns a tight rein will continue to be kept on spending in the years ahead.

The country yesterday successfully passed the final review under the terms of the bailout, meeting all the financial targets agreed with the European Commission, ECB, and IMF.

However, while the three years of close monitoring by the three funding bodies is effectively over, pending an official exit date of Dec 15, Finance Minister Michael Noonan said it would be business as usual when it comes to keeping spending under control.

“The big change is not that we are free from all difficulty, but that the responsibility has been passed back to the Irish Government,” he said.

Taoiseach Enda Kenny declared the troika’s departure historic. “We can send out a message to our own people of clarity and certainty, that we are moving on to a new place, and that place is back as a rightful member of the eurozone.”

The Government may seek a backup credit line from the European Stability Mechanism, the EU’s rescue fund, in case of difficulties while the re-entry to the markets takes place.

Mr Noonan said a decision on whether to do so or whether to pursue a “clean exit” would be made before Dec 15.

Either way, the country’s formal exit will not be completely clean, as the troika still have to prepare a final report which will detail outstanding issues it believes the Government must address to ensure greater efficiency in public services and the necessary conditions for economic growth.

Key issues it will be highlighting are the unresolved mortgage default crisis, continuing high drug prices, and the high costs of administering the health services, as well as delays in passing the Legal Services Regulation Bill designed to bring down legal costs.

The Department of Justice acknowledged the troika’s concern over the legal bill issue and said passing the new legislation remained a priority. The department said amendments to the bill and an impact analysis had been prepared and a discussion of the bill would resume “as soon as possible”, but it could not give a target date for completion of the process.

The Department of Health said it was finalising an “e-health strategy” to enable greater use of computerisation in patient records and prescribing. It would be necessary to assign a unique number to every person for use in accessing heath and social services and a Health Identifiers Bill would be published before the end of the year to provide a legal basis.