Ireland ‘not in need’ of credit line

Ireland was advised not to apply for additional aid from the EU’s rescue fund as it exits the bailout programme by the German finance minister, Wolfgang Schaeuble.

At the same time in Berlin — where negotiations are finalising a grand coalition between Angela Merkel’s CDU and the Socialists — senior Socialist politicians once again fingered Ireland’s corporation tax rate as being unacceptable.

Finance Minister Michael Noonan is due to begin discussions with the European Commission and the ECB next week and with the IMF on October 28 on arrangements for the country’s exit from the bailout programme in mid-December.

One of the main issues is expected to be access to a precautionary credit line from the EU’s fund, the ESM, to tap in case of difficulties when Ireland returns fully to borrowing on the markets next year.

While the ECB has indicated it believes this would be a good idea, Mr Schaeuble has said he does not believe Ireland would need it. “I do not see any necessity for this... Ireland is doing very well and the Irish programme will come to an end at the end of this year because Ireland is very successful,” he said.

The Bundestag, Germany’s parliament, would have to approve any request for a credit line and Mr Schaeuble would prefer not to have such issues raised at all. At the same time, he again ruled out Ireland accessing money to compensate for the bailout of its banks.

“Retroactive bank recapitalisation is especially not probable for the time being because there is no direct bank recapitalisation in the treaty... and Germany would need a change of German legislation for this,” he said.

Labour party MEP Phil Prendergast took her German Socialist colleagues in the European Parliament to task for their statement in relation to Ireland’s corporation tax rate.

“Statements that Ireland cannot be allowed to have its current 12.5% corporate tax rate by members of the German SPD, including your General Secretary Andrea Nahles, [are] both an affront to the autonomy of the Irish government and to the principle of subsidiarity that must be tested in everything we do in the European Union,” she said in a letter to the Socialist group.