Dáil Éireann Debate, Tuesday - 29 January 2013
246. Deputy Michael McGrath asked the Minister for Finance the preconditions which apply in order for Irish Government bonds to be eligible for purchase under the ECB's outright monetary transactions; and if he will make a statement on the matter. [4108/13]
View answerThe European Central Bank (ECB) has legal personality under public international law, and is fully independent in the carrying out of its functions. This independence is enshrined in the EU Treaties. The ECB has stated that Outright Monetary Transactions (OMT) will be considered for future cases of EFSF/ESM macroeconomic adjustment programmes or precautionary programmes. They may also be considered for Member States currently under a macroeconomic adjustment programme when they are regaining bond market access.
The ECB has also stated that a necessary condition for OMT is strict and effective conditionality attached to an appropriate European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) programme. Such programmes can take the form of a full EFSF/ESM macroeconomic adjustment programme or a precautionary programme (Enhanced Conditions Credit Line), provided that they include the possibility of EFSF/ESM primary market purchases. The ECB will seek the involvement of the IMF for the design of the country-specific conditionality and the monitoring of such a programme.
The ECB notes that its Governing Council will consider OMT to the extent that they are warranted from a monetary policy perspective as long as programme conditionality is fully respected, and terminate them once their objectives are achieved or when there is non-compliance with the macroeconomic adjustment or precautionary programme. The ECB’s Governing Council will decide on the start, continuation and suspension of OMT, following a thorough assessment, in full discretion and acting in accordance with its monetary policy mandate. I believe the ECB’s announcement regarding its OMT programme is a significant development and is viewed as such by the financial markets.
