Cowen: No need for Ireland to be ashamed
The Taoiseach Brian Cowen tonight told his country there was no need to be ashamed as he opened its books to the International Monetary Fund.
Mr Cowen insisted Irish sovereignty was not for sale, despite predictions from the country’s top banker of an imminent bailout running into tens of billions,
“There is no question of loss of sovereignty for Ireland,” Mr Cowen said.
An IMF mission of up to 12 officials will begin poring over Ireland’s debt-riddled accounts in Dublin in the morning.
Mission chief Ajai Chopra has already taken up lodgings across the road from Government Buildings at the exclusive Merrion Hotel.
The ominous arrival has heaped further tension on a population struggling to cope with uncertainty surrounding the country’s crippled finances.
In an attempt to calm fears, Mr Cowen – who has been widely criticised over his ability to communicate with the public – insisted Ireland was simply working out options with EU partners to secure the banking sector and the Euro currency.
“I don’t believe there is reason for people to be in any way ashamed or humiliated at all,” he said.
Mr Cowen repeated that “no formal application” has been made for a bailout or loans from either the EU or the IMF.
But suggesting a funding package was on the cards he added: “It will be the sovereign decision of the Irish Government on behalf of the Irish people that will decide what shape any package would be where we can decide that’s in our best interests.
“At the moment we are in the process of working out what the best options are.”
Mr Cowen said “technical discussions” were intensifying since the meeting of EU finance ministers in Brussels earlier this week.
“When all of those implications have been worked out – and they haven’t all been worked out, and no specific proposal has been put to the Government – it is then that the Government will determine what is in the best interests of the country at this time,” he added.
Accepting he has come under intense criticism within Ireland, Mr Cowen insisted his Government’s actions have been “fair, valid and responsible”.
But one former Taoiseach described the arrival of IMF officials as a “very, very sad day for Ireland”.
John Bruton, now EU ambassador to Washington, said the country’s long struggle for independence was for the right to have sovereign control over spending and taxation.
“We’re now in a position where we’ll still be making the decisions but we won’t be making them on our own, we’ll have others looking over our shoulders,” he said.
“This is a very serious state of affairs.”
Mr Bruton suggested the IMF would be “involved in all of the decisions” in the upcoming 6 billion euro cost-cutting Budget on December 7.
But he added that Ireland could quickly regain full control of its affairs if it took all the decisions that were necessary.
Brian Lenihan, Finance Minister, appeared to signal the Government’s desired way out of the financial mess – “substantial contingency capital”, or ’CoCo’ as it has become known in the banking world.
Money would be borrowed from the IMF and the EU, with other bilateral funds paid into a pot, in effect creating a massive cash buffer for the banks in the event of another blackhole.
The loans would be guaranteed by an elaborate share scheme triggered if the banks’ finances hit a red-alert mark. Lloyds of London adopted a similar approach to tackle funding issues.
“The job of Government is to protect the taxpayer and that is what we have been doing and what we are now doing,” the minister said.
“If the Government has been reticent in making public comment, it has been in the interests of protecting the taxpayer.
“Jumping to conclusions ahead of all of the facts is not to the benefit of the taxpayer. Nor is it in our interests in advance of discussions that are now taking place.”
Professor Patrick Honohan, Ireland’s Central Bank Governor, was the first and only senior Irish official to give an indication of the extent of a potential bailout – tens of billions.
But he added: “I don’t see it as something that is really worrisome or should lead to a huge change in direction.”
And with the IMF and EU bean counters knocking, three ministers were prompted to fight Ireland’s corner over the controversial 12.5% corporation tax – among the lowest in Europe.
The message to the business chiefs, taxpayers and the IMF/EU was: “It’s non-negotiable.”
The IMF refused to be drawn on the issue insisting every state is different but the next seven to ten days will be crucial as the agency’s 12-strong team of auditors sees the financial mess first hand.
