Dáil Éireann Debate, Tuesday - 21 May 2013
101. Deputy Peadar Tóibín asked the Minister for Finance if he will outline Ireland's options on potentially leaving the Troika programme; and the way the use of outright monetary transactions would affect any exit. [23947/13]
View answerAs the Deputy is aware, the EU-IMF Programme of Financial Support is envisaged to run to the end of 2013. The Government’s focus is now firmly fixed on exiting from the programme. It is the Government’s intention to achieve a successful and durable exit from our programme and we are doing all we can to this end. We continue to meet our programme conditions and our strong implementation record has been recognized by our external partners. The recent highly successful sale of long term bonds by NTMA is another very significant step towards regaining full market access.
The options available to Ireland on exiting the programme fall into two broad categories. A successful exit without any further support or a successful exit supported by the ESM’s and the IMF’s precautionary backstop facilities. By way of information, the precautionary financial assistance which the IMF and the European Stability Mechanism (ESM) can provide is as follows:
- The ESM Treaty provides, in Article 14, that the Board of Governors may decide to grant precautionary financial assistance in the form of a precautionary conditioned credit line (PCCL) or in the form of an enhanced conditions credit line (ECCL). The Treaty also provides for the conditionality, terms and conditions to be attached to such assistance. Further information in relation to these instruments is available on the ESM website at http://www.esm.europa.eu/.
- The IMF has a number of precautionary or standby type facilities including Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), the Extended Funding Facility (EFF) and the Stand By Arrangement (SBA). These different instruments are designed to address different sets of circumstances, and the terms and conditions attaching to them are structured accordingly. Further information on these instruments is available on the IMF website at http://www.imf.org/.
All relevant options will be considered in the light of what will be appropriate for Ireland at the time of our exit. The issue of our exit options has yet to be fully considered by Government and accordingly no decisions have been taken to date.
In relation to the ECB’s Outright Monetary Transactions (OMT), the Governing Council of the ECB made a decision to establish OMTs on 2nd August 2012, and issued a press statement on 6th September 2012 which outlined its technical features. According to this ECB Press Release, the purpose of OMT is: “Safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy”. The ECB press statement also notes that 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. It is therefore clear that the decision on whether to grant OMT or otherwise in any particular case is a matter for the ECB, which is an independent body.
