Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context

Question 183: To ask the Minister for Finance if the implementation of the programme for Government may be affected by the EU-IMF deal; and if he will make a statement on the matter. [19810/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The Programme for Government represents the Government's agreed policy agenda. The policies set out in it are designed to facilitate economic growth, restore confidence, fix the banking system, bring order to our public finances, and support the creation of jobs. The Programme for Government explicitly states its support for the objectives of the EU-IMF programme. The EU-IMF Programme of financial support represents a three year programme aimed at restructuring and recapitalising the financial system, achieving fiscal sustainability and returning the Irish economy to growth. It is providing a significant amount of funding - €67.5 billion of external funding - at rates which are considerably lower than those available to us in the financial markets. This funding supports the objectives of the Programme for Government and without it the scope for Government policy actions would be considerably more constrained.

The financial support is provided on the basis of policy conditionality relating to fiscal consolidation, financial sector restructuring, structural reform and structural fiscal reform. An integral part of the EU - IMF programme is our commitment to consult with the European Commission, the ECB and the IMF on the adoption of policies that are not consistent with the EU/IMF Programme.

From my dealings to date, I have found the Programme partners are open to changes in the actions and conditions set out in the EU/IMF Programme provided any such changes are accompanied by compensatory measures of equal value or effect. The primary forum for such consultation is the quarterly review missions with the Programme partners, the fourth of which takes place from the 11th to the 21st of October 2011. These review missions provide an opportunity to consult with the Programme partners on the various measures set out in the Memorandum of Understanding and Memorandum of Economic and Financial Policies. In this context, I would remind the Deputy that the Government has already successfully renegotiated elements of the Programme – for example the Jobs initiative, the ending of further asset transfers to NAMA, and reversal of the Minimum Wage cut. More recently, we have successfully renegotiated the interest rate charged for the loans along with important changes and improvements to the EU's EFSF funding facility. For the forthcoming review, the Government focus will be on issues such the composition of fiscal policy both for Budget 2012 and for the medium terms along with issues such as asset disposals.