Pressure grows on Government to accept bailout as Honohan tells it as it is

PRESSURE mounted on the Government yesterday to accept emergency funding from Europe and the IMF as Central Bank governor Patrick Honohan said he expected Ireland would be offered a substantial bailout.

“The intention is and the expectation is, on their part and personally on my part, that negotiations or discussions will be effective and a loan will be made available and drawn down as necessary,” Professor Honohan told RTÉ news.

Finance Minister Brian Lenihan said last night “I certainly feel no sense of shame” that Ireland is now on the brink of a massive financial bailout to save the banks and the country.

As key members of the IMF and EU officials arrived in Dublin yesterday, Mr Lenihan denied the IMF will have a direct input into the €15bn four-year plan or the budget.

Friends First chief economist Jim Power disagrees. He expects the IMF and EU to have a significant input into policy in the next two to three years.

At the launch of the Friends First quarterly bulletin Mr Power said Ireland would face sustained pressure from our new paymasters.

He said, since the bailout happened for Greece, it has been subjected to very detailed scrutiny of its fiscal management and history has shown the IMF have withheld funding for countries in the past when they were not satisfied with the progress being made.

Mr Power also said the Croke Park Agreement would be scrapped to ensure the economy is returned to a sound financial footing.

Mr Lenihan denied that we had to call in the IMF and the ECB because the banking policies he pursued had been a massive failure: “No, every finance minister in Europe indicated last Tuesday night we had taken all the correct steps in relation to banking and any European policy would amount to an intensification of what we have done already.

“The big difficulty is that the banks became too unmanageable for the state itself – that is why we have to consider external assistance,” he said.

IMF spokeswoman Caroline Atkinson refused to comment on “hypothetical” questions about how much finance Ireland might need or how a package could be structured.

The International Monetary Fund has not received a request for financial support, she said.