Challenges ahead despite bailout exit, says Kenny

Taoiseach Enda Kenny warned the Dáil that while Ireland was opting for a clean break from the EU/IMF bailout without a credit safety net there were still demanding times ahead for the country.

Challenges ahead despite bailout exit, says Kenny

Likewise, the Tánaiste said while the decision was historic, there would be no celebrations until Ireland’s economic recovery was complete.

The Taoiseach said the decision not to seek a precautionary credit line was finalised after a Cabinet meeting during which Finance Minister Michael Noonan recommended the clean break. “The Government has decided that Ireland will exit the EU-IMF assistance programme on Dec 15, without the need to pre-arrange a new precautionary credit line from our EU and IMF partners.”

Mr Kenny said it was the right decision for Ireland and now was the right time to take the decision. He reminded deputies that Ireland was eligible for access to the €500bn funding backstop provided by the European Stability Mechanism.

However, he warned there would be no cash windfall and the country faced challenging times ahead.

“Neither today’s decision, nor the exit from the bail-out in December, means the end of difficult economic decisions. There are still demanding times ahead. It does not mean any windfall of cash. It won’t mean that our economic and financial challenges are over,” he said.

The country would exit the bailout in a “strong position” as confidence in Ireland had improved considerably in recent months and interest rates on government bonds were now at highly affordable levels.

He said he had spoken to the German chancellor, Angela Merkel, on a number of occasions and she was going to support Ireland in whatever decision it made by working more closely to reinforce Ireland’s economic recovery and improving funding mechanisms for the real economy, including access to finance for Irish SMEs.

“The German Government has asked KFW, the German development bank, to work with the German and Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date,” he said.

Mr Kenny also said his Government would set out a path to “a brighter economic future” and would publish a new Medium-Term Economic Strategy alongside the bailout exit in December.

He said it would be an economic plan based on enterprise not speculation as “never again will our country’s fortunes be sacrificed to speculation, greed and short-term gain”.

Tánaiste Eamon Gilmore said the decision not to seek a precautionary credit line was “historic, important and welcome”, but there was no cause for celebrations.

He said exiting the bailout without the precautionary programme was a “milestone” and it restored Ireland to a normal place among the eurozone countries where it would no longer be a programme country.

He said the decision would never have been achieved without the patience and endurance of the Irish people who have suffered from the crisis.

Merkel statement

“I welcome the announcement today that Ireland will exit from the EU IMF programme on Dec 15, marking a very significant achievement as the first Eurozone MS to have successfully completed a programme.

“This is an important day for Ireland, and an important moment for the eurozone. It is now time for Ireland to return to the markets in a sustainable way, strong enough to do so without the need for further credit support.

“Germany is confident that the Irish Government is acting in the best interests of the Irish people and the Irish economy. Ireland is ready for this step.

“We also recognise that partners in the eurozone should continue to work to bolster Ireland’s success as it emerges from the programme to support Ireland’s efforts to restore stability, jobs and growth to the Irish economy, and to the eurozone as a whole.

“Ireland and Germany have agreed to cooperate for an initiative to improve funding mechanisms for the real economy, including access to finance for Irish SMEs. The KFW, the German development bank will work with the Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date.”

More in this section