Bloomberg News

Noonan Examines Greek Package as Ireland Eyes Bailout Exit

November 29, 2012

Irish Finance Minister Michael Noonan said the nation is assessing the aid package given to Greece earlier this week and will push for anything that helps Ireland exit its bailout program.

Noonan told reporters in Dublin today he is examining concessions given to Greece in the context of papers being drawn up by Ireland’s bailout partners ahead of the country’s planned exit from its aid program at the end of next year.

European finance ministers agreed on Nov. 27 to cut Greece’s rates on bailout loans, suspend interest payments for a decade and to give the nation more time to repay. The debt- burdened country was also cleared to receive a 34.4 billion euros ($44.7 billion) loan installment in December.

Dutch Prime Minister Mark Rutte said yesterday he opposed granting concessions to Ireland and Portugal, which followed Greece into bailout programs in the past two years.

“I absolutely believe that investors understand that Greece is a particularly difficult case,” Rutte, said in an interview in The Hague, the Netherlands. “I understand Ireland and Portugal are looking with keen interest at the Greek package and what that might mean for their countries.”

Portuguese Finance Minister Vitor Gaspar said earlier this week that Portugal and Ireland can benefit from the eased terms on the emergency aid for Greece.

Credit Line

Ireland’s bailout creditors may propose a precautionary credit line to ease the country’s exit from its 67.5 billion- euro rescue program at the end of 2013, Noonan and John Corrigan, the head of the nation’s debt agency, said Nov. 22.

The economy is struggling to emerge from the worst recession in its modern history, which has seen home prices plunge and unemployment triple since 2007. Noonan said earlier this month that while the government may raise its 2012 economic growth forecast from 0.7 percent, it expects to cut its 2013 projection.

Irish payrolls fell 0.2 percent to 1.84 million people in the third quarter from the same period a year ago, the country’s central statistics office said today. The drop compares with an annual decline of 1.3 percent in the three months through June.

“The bottom line is that the labor market remains very weak,” Alan McQuaid, an economist with Merrion stockbrokers in Dublin, said in a note today. “Anecdotal evidence suggests that emigration is playing a big part in keeping down the numbers. There is no easy fix.”

The yield on Ireland’s benchmark security due in October 2020 fell 4 basis points to 4.45 percent today, down from 14 percent in July 2011.

Moody’s Investors Service, which downgraded Ireland to non- investment grade last year, said on Nov. 14 that the country may need an official funding backstop as it seeks to return to bond markets. Noonan said bailout partners are considering “a variety of other backstop measures” and “they have promised to provide me with the policy paper before Christmas.”

To contact the reporters on this story: Dara Doyle in Brussels at ddoyle1@bloomberg.net; Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net


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