Bailout exit declaration exaggerated half-truth

THE vaunted declaration by Taoiseach Enda Kenny that Ireland will exit the bailout without a precautionary credit line, though welcome, is an exaggerated half-truth aimed at building market confidence ahead of the Dec 15 deadline.

Mr Kenny said, before this decision, he talked with German Chancellor Angela Merkel who has asked German development bank KFW to work with Irish and German authorities to discuss ways to improve Ireland’s funding mechanisms.

The spin has firmly located the involvement of KFW as a bank that will lend significantly to businesses. This is to be welcomed at face value. This is because one of the biggest problems preventing Ireland from recovering economically has been the failure of Irish banks to open up sufficient lines of credit to small and medium-sized businesses. This in turn has been a significant factor in preventing any significant improvements in the Irish domestic economy.