Cabinet agrees 6-year post-bailout development plan

The Government’s economic plan once Ireland exits the bailout will include a six-year road map for jobs, enterprise and future infrastructure projects.

The strategy will include updated budget projections up to 2016, post-troika commitments and proposals for the period 2014 to 2020.

It is expected to include a commitment to finish certain terms agreed under the bailout, including the sale of state assets and reforms of the legal and healthcare sectors.

The plan is being compiled by secretaries general John Moran and Robert Watt from the Departments of Finance and Public Expenditure respectively.

Government sources confirmed the timeframe last night and said the Cabinet agreed initial terms for the mid-term economic strategy as far back as June. It will be announced to coincide with Ireland’s exit from the bailout on Dec 15.

Tánaiste Eamon Gilmore said yesterday the decision to leave the bailout was an informed one, sounded out over some time.

Despite criticism from some economists that Ireland will have no financial insurance policy when it exits the programme, he defended the decision. Any need to bail out banks in the future would also be helped by Europe, he added.

There was enough money to run the state until 2015, he said, adding that Ireland already had its own ‘backstop’ or credit line, with over €20bn stored up by the NTMA.

Bond yields were also at a historic low level, he said.

His comments come after Central Bank governor Patrick Honohan said Irish banks would need more capital by 2019. But Mr Gilmore said banks had been recapitalised in 2011 beyond normal European levels.

If Irish banks did not attract external investment, he said, the European Stability Mechanism was in place for such a scenario: “The stress testing is part of a European process. Therefore, if any issues arise as to any additional capital, then it will be addressed in a European context and as part of banking union arrangements which will then be in place.”