Brussels, 14/11/2013 (Agence Europe) - On Thursday 14 November, the Irish prime minister, Enda Kenny, announced the Ireland would exit the aid programme without any further aid on 15 December.
In a speech to the European Parliament, Kenny said Ireland would exit the aid programme in a strong position, adding that the government had been planning for three years for a return to normal financing conditions (see EUROPE 10962). Irish Finance Minister Michael Noonan said the government thinks that the time has now come to exit the programme, but it might not always be the case. Speaking on his arrival in Brussels, Noonan mentioned the 256 actions undertaken in three years with the sole aim of restoring the credibility of a normal eurozone nation. He said that requesting a preventative credit line (ECCL) from the European Stability Mechanism (ESM) would force the country to take the same decision they were taking today, but they didn't know under what circumstances the decision would be taken in a year's time. He added that the fall in ECB interest rates made now a good time to exit the programme.
“The Irish Government's assessment is that the best option for Ireland is to exit the programme as planned in December without a pre-arranged backstop”, said Ireland's Permanent Representation to the EU in a press release, citing a number of reasons: “The market and sovereign conditions are favourable towards Ireland with the country returning to the markets in 2012, holding over €20 billion in cash reserves at year end which we can use to ensure that we can meet our maturing commitments and funding costs till early 2015 and Irish sovereign bond yields at historically low levels; The public finances are under control in Ireland comfortably in line with EDP targets. Ireland is targeting a deficit of 4.8% in 2014 which is within the 5.1% EDP target and will deliver a primary balance or small surplus. The Government is committed to reducing the deficit to less than 3% in 2015 and putting the debt ratio on a downward path; The two-pack, the six-pack and the stability treaty, the introduction of the ESM, and the major efforts by the ECB to do whatever it takes to safeguard the currency, further support our efforts to make a sustainable and durable return to the markets; Domestic and international economic conditions are improving, monetary policy decisions are conducive to exit and confidence and sentiment towards Ireland has improved considerably in recent months”.
“Today is a good day for Ireland and the Irish people. It provides clear evidence that determined implementation of a comprehensive reform agenda can decisively turn around a country's economic fortunes and put it back on a path of sustainable growth and rising employment”, said Euro Commissioner Olli Rehn. In its Autumn Economic Forecasts, the Commission expects economic growth in Ireland to be 0.8% in 2013 and 0.9% in 2014, for the deficit to reach 6.7% of GDP in 2013 and 5.2% in 2014, for the debt to reach 124.4% of GDP in 2013 and 120.8% in 2014 and for unemployment to stand at 13.3% in 2013 and 12.3% in 2014. Lower therefore, but still high. The commissioner added: “While challenges remain, Ireland has made impressive progress and is well placed to make a successful and durable programme exit”.
On arrival in Brussels for the Eurogroup meeting, Eurogroup head Jeroen Dijsselbloem said he was extremely optimistic about a positive exit from the aid programme for Ireland and from the bank bailout programme for Spain. (MB/transl.fl)