Tough tasks ahead for the cabinet
TAOISEACH: Just two weeks to ensure a better deal on the EU loan is on the cards. He will need a commitment to cut the interest rate and will look for a longer period over which to repay part of the loan. He will also argue to have the bailout fund available for countries to buy back their debt on the markets at much cheaper rates. Getting a better deal generally will be a continuous negotiating process as the agreement is reviewed every three months.
If the situation deteriorates, and the country faces a sovereign default with its banks gone bust, he will need to get his fellow EU leaders to understand the situation Ireland finds itself in and help address the problems and restore Ireland’s reputation as an EU-player.
FOREIGN AFFAIRS AND TRADE: Helps prepare the agenda for EU leaders’ summits but less than before as EU President Herman Van Rompuy and the Taoiseach’s office are more involved.
In trade matters, Ireland is facing a huge challenge as the EU negotiates a trade agreement with Mercusor, representing four Latin American countries, that farmers fear will result in cheap beef imports they can’t compete with. Doha world trade talks could resume this year. Industry, on the other hand, would welcome agreements as the gateway to increase their exports.
FINANCE: The next three weeks will be a baptism of fire with, by the end of the month:
- Report card from the EU-IMF on the first three months’ progress implementing the programme, including spending and tax take;
- The results of the banks’ stress tests showing how much more money they need.
He will have to decide whether or not to put into the banks the €10 billion deferred from the end of February. Most likely he will need to borrow even more money to shore up the banks.
A strategy to wean the banks off ECB/state support and he will be keeping his fingers crossed that the ECB continues to provide everyday liquidity as long as possible so the country has a banking system.
In the meantime, a raft of changes in regulating the banks, including increasing the amount of capital they need to hold, will have to be overseen.
And he will have to convince the European Commission to extend the date when the budget must be reduced to 3% of GDP by a year to 2015.
Every tiny increase in interest rates, oil prices, unemployment, exports and any drop in tax take or growth will make it difficult for Ireland to meet the objectives of the EU-IMF deal and secure the next tranche of money. He will be under pressure to pump money into banks, fire-sale their assets and sell off state-owned enterprises.
And if the debt is unsustainable and the country has to default, he and the Taoiseach will have to steer us through a whole new crisis and convince their EU colleagues to show solidarity.
PUBLIC SECTOR REFORM: Will look after public sector management and spending of each government department. Agreements to cut public service numbers and monitor government spending will play a substantial role in meeting the demands of the EU-IMF deal. The comprehensive review of department spending will also have to deliver some of the EU targets in terms of cutting school drop-out levels and those at risk of poverty, and spending more on research and development.
ENTERPRISE, JOBS AND INNOVATION: He will have to sort out the consequences of a common consolidated corporate tax base that will effectively undermine Ireland’s 12.5% corporation tax — and ensure the country gets the same income. Will have to set an employment target for the national reform programme — Ireland is one of just three countries not to do so yet. Encouraging projects that qualify for a larger share of the EU’s €60 billion research and innovation budget.
ENVIRONMENT, COMMUNITY AND LOCAL GOVERNMENT: Last chance to save the remaining 1% of our bogs; last chance to save some of our birds like the corncrake; control local authorities breaking or condoning the breaking law on illegal dumping sites; resolve one agency giving a licence for works despite it not having planning permission. Last chance to conform to rulings on carrying out impact assessments prior to planning or face multimillion euro fines.
HEALTH: Revision of legislation on tobacco coming up which could limit additives including those designed to addict you to cigarettes and have plain packaging.
JUSTICE, EQUALITY AND DEFENCE: Review of Ireland’s policy of opting in/opting out of justice issues including common asylum procedures and relationship with the Schengen Agreement generally. Reform of data protection law to cover internet, social networks. Setting common rights for suspects arrested in member states.
SOCIAL PROTECTION: Implement national target to reduce the number of people at risk of poverty and exclusion — EU believes the targets put forward by most countries are not ambitious enough.
AGRICULTURE, MARINE, FOOD: Future of CAP — with Britain and other countries wanting money for farmers cut in EU budget of 2013. Tough negotiations beginning shortly and government will need to balance needs of farming with spending more of EU budget on competitiveness, research etc. GMOs and trade deals.
ARTS, HERITAGE AND THE GAELTACHT: New programme for culture and creative industries including film and TV to encourage growth and jobs.
EDUCATION: An initiative to reverse an increase in poor literacy levels and reduce the numbers of early school-leavers. Modernise universities; increase numbers in third level; funding to allow students and apprentices study abroad.
TRANSPORT, TOURISM AND SPORT: Single European Sky gaining momentum in effort to cut cost of flying, distances and greenhouse gas emissions. Hopes for a special sport programme with some EU funding aimed at encouraging people to go back to school.
DEVELOPMENT: Host EU Development Commissioner Andris Piebalgs when he visits Dublin to outline proposed new EU development strategy — not unlike Ireland’s.
