EU-IMF Programme of Support

Tuesday, 19 November 2013

Questions (181)

Micheál Martin

Question:

181. Deputy Micheál Martin asked the Minister for Finance his views on a precautionary credit line for Ireland; and if he will make a statement on the matter. [44412/13]

View answer

Written answers

As the Deputy will be aware, the Government decided on 14 November that Ireland is now in the best position to exit the EU-IMF programme of financial assistance on December 15 without the need to pre-arrange a new precautionary credit line from our EU and IMF partners.

Following a careful and thorough assessment of all of the available options, and broad consultation with the European Commission, the ECB, the IMF, the President and members of the Eurogroup, the Governor of the Central Bank of Ireland and the NTMA, the decision was taken to exit without a pre-arranged precautionary facility or backstop.

I am of the view that exiting our EU-IMF programme of financial assistance without a pre-arranged precautionary facility or backstop is the right decision for Ireland. Market confidence in Ireland is high, the public finances are under control, we are reducing our deficit and debt levels and economic conditions and sentiment are improving. We have already returned successfully to the financial markets. We have a domestic backstop in place with cash reserves expected to be of the order of €20 billion by the end of the year. This option represents greater normalisation, with Ireland now subject to EU economic co-ordination and fiscal surveillance, and governance rules that apply to other EU and Euro Area Member States that are not in a programme of assistance. This decision is the latest in a series of steps to return Ireland to normal economic, budgetary and funding conditions. Like most other sovereign eurozone countries, from 2014 we will be in a position to fund ourselves normally on the markets. Confidence in Ireland has improved considerably in recent months and interest rates on Irish Government bonds are at now highly affordable levels. This is the right decision for Ireland.