Ministers to plead with troika to cut interest bill
The Government will also ask permission to divert a large swathe of the €2bn set to be raised from part privatising companies like ESB from debt repayments into job creation schemes.
After receiving a humiliating rebuff from European central Bank chairman Jean Claude Trichet over plans to burn bondholders, Finance Minister Michael Noonan will be hoping for more flexibility from the troika regarding the €3bn a year interest rate payments on the promissory notes the previous Fianna Fáil/Green government agreed to pay from 2013.
The troika will meet all senior government figures during the fact-finding visit to Dublin to assess the country’s progress in meeting the terms of its emergency rescue loan from the EU/IMF over the past three months.
A new three-year plan for economic growth will also be put to the foreign financial chiefs who must sign off on key economic decisions.
That plan is likely to be unveiled after the presidential election on October 27 and will set out the cuts and tax rises needed to severely reduce the deficit. The troika will also have to approve the cuts and extra levies totalling at least €3.6bn to be unveiled in the budget.
Pumping money raised from selling off parts of state companies into job creation would be a key tool for economic recovery, junior finance minister Brian Hayes said.
“We know that austerity alone will not get this economy out of the hole that we are in. How do we use the resources from that sale to help stimulate the domestic economy — that is an ongoing issue with the troika.
“There is little point in selling a state asset if you couldn’t then use the proceeds from that sale to help the Irish economy at this perilous time. We need a growth strategy allied to an obvious rebalancing of the budget,” Mr Hayes said.
Tánaiste Eamon Gilmore said he expected an upbeat assessment from the troika when they effectively go over the state’s books.
“I am confident we have met the terms that we had to keep. Europe is aware that Ireland is making progress in real terms. We’ve seen the growth figures of 1.6% in the second quarter of the year, we’ve seen recent unemployment figures show the biggest drop in unemployment in four years, and have very health trade figures — but we are not going to take our eye off the ball.”
