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| The Minister for Finance Brian Lenihan and Olli Rehn, EU Economic and Monetary Affairs Commissioner at a press conference in the Department of Finance, Nov 08, 2010 |
The Minister for Finance today confirmed that Ireland
has agreed to request a rescue bailout after talks with
officials from the European Commission
on behalf of the EU, the
International Monetary Fund (IMF) and the European Central Bank
(ECB).
In an interview on RTÉ
radio's This Week programme, Brian Lenihan said he
would
propose the application for assistance this afternoon's meeting of the
Cabinet.
Lenihan said discussions with the agencies
had concluded Saturday evening.
After the expected approval of the Cabinet, Ireland would now be formally apply for a rescue
programme and formal negotiations will begin on the support
for the banking sector and what conditions the IMF will set
in areas of overdue reform and public spending.
The Cabinet is also due to agree on a four-year plan to
reduce the annual budget deficit to 3% of GDP (gross domestic
product) by 2014.
Officials from the European Commission have been working with Irish officials
on the plan in recent weeks.
The plan is expected to be published in the
next week and it will set out the details a planned fiscal
adjustment of taxes and spending cuts of €15bn in the period
2011-2014.
Officials from the IMF, EC and ECB arrived in Dublin on Thursday following
bare-faced lying by senior ministers that any discussions were taking place.
European commissioner for economic and monetary
affairs, Olli Rehn, had said on Wednesday after a meeting of
the Ecofin council of EU27 finance ministers that that any
possible aid plan to Ireland would be "country program," not
direct lending to the banking sector.
"They can only do so through a country program, but one with
a special emphasis on strengthening the banking sector,"
he
said.
Rehn said technical talks between the EU and the Irish
government will focus on two areas, one is on the four-year
budget-cutting plan and the 2011 budget, the other is on
state of the Irish banking sector and the need for
restructuring.
“In this kind of a programme you have always fiscal and
economic conditions, which would be based on the four-year
fiscal plan and next year’s budget,” he said. “They are by
and large in line with revised stability programme of
Ireland and we endorse these objectives.
On the other side, there is the question of the
restructuring of the banking sector and there the obvious
goal is that the Irish banking sector has to be made viable
and sustainable, which will require quite some
reorganisation and restructuring in that particular area."
Ireland won’t be required to raise its
corporate tax rate as part of a European Union bailout, French President Nicolas
Sarkozy said on Saturday.
“When you have to tackle a deficit, you have two levers, spending and taxes,”
Sarkozy said in Lisbon where he was attending a summit of NATO leaders.
“I can’t believe that our Irish friends, in full
sovereignty, won’t look at both since they have more room for maneuver given
that their tax rates are lower. But that’s not a demand or a condition, just an
opinion.”
Ireland could
have the option of rising the corporate tax for domestic companies and retaining
teh tax rate of 12.5% for exporting firms.
Meanwhile, the Red C poll for the Sunday Business Post shows Fianna
Fáil has dropped one point to 17% - - another record low for
the party in a Red C poll.
Support for Fine Gael is up one to 33%, Labour is
unchanged at 27%, the Greens drop one to 3%, while Sinn Féin
support is up two points to 11% - the party's best Red C
result in 18 months.
Lenihan audio clip
Brian
Cowen - - Ireland's Herbert Hoover in denial to the last as curtain falls on the
Age of the Irish Scrounger
