Greek bailout may cost Ireland up to €1bn
Public Expenditure Minister Brendan Howlin yesterday said that if Greece was to get a new programme, Ireland would be obliged to pay 2% of any new bailout
The International Monetary Fund (IMF) last week warned that the Greek economy would need an extra €50bn package for a potential third bailout programme.
Department of Finance sources, while reluctant to comment yesterday, confirmed that Ireland would pay €1bn or 2% of a new bailout for Athens if a programme was in the order of €50bn.
The high cost — significantly more than previous funds lent to Greece by Ireland — would in turn potentially restrict any spending plans or budget commitments by the Coalition.
Speaking on RTÉ’s The Week in Politics yesterday, Mr Howlin said he had “profound empathy” for the Greek people, who faced “enormous difficulties”.
Asked about the IMF suggestions of a €50bn new bailout for Greece and what Ireland’s contribution would be, the Labour minister replied that it would be in the order of 2%.
Ireland previously contributed €347m for a Greek bailout package in May 2010, a figure which was much lower as the country was still in its own programme.
However, now that Ireland has left its rescue programme, our liabilities would be much greater with any third bailout for Athens.
Mr Howlin, echoing EU officials, yesterday also indicated that some sort of debt write-down for Greece would also be necessary. Any further bailout and terms agreed by EU members will be dictated by the outcome of yesterday’s referendum in Greece on its bailout, and if it stays in the eurozone.
Transport Minister Paschal Donohoe yesterday said there would be huge risks to the Greek economy whether it was a yes or a no vote. There were other European countries that were poorer than Greece that would have concerns about any writedown of the funds owed to them, said the Fine Gael minister.
However, he said that if the Greek people voted no, it would leave their country on a path to the most “extraordinary unknown risk”. Fear could “fill the country’s horizon” for years to come, he warned.
International creditors have indicated that a yes vote in Greece will leave it open to a lifeline for further financial aid. This could be on tougher terms, after Athens defaulted on a €1.6bn IMF payment last week.
Thousands of people attended a rally in Dublin in solidarity with the Greek people on Saturday, calling for a no vote.
Greek finance minister Yanis Varoufakis accused the country’s international creditors of “terrorism”, for interfering with the referendum and making comments ahead of the vote.
Tánaiste Joan Burton said before the weekend: “It’s going to be a debt restructuring and that does require the Greek government to negotiate a technical settlement but particularly to negotiate a social settlement for people who are in distress in Greece.”
