Taoiseach Enda Kenny has reported “strong support” at the World Economic Forum (WEF) in Davos for debt concessions to Ireland to ease a return to financial markets.
Mr Kenny and Minister for Finance Michael Noonan began a day of talks yesterday with a “very positive” meeting with IMF chief executive Christine Lagarde.
They invited Ms Lagarde to visit Ireland and her spokesperson later confirmed she had accepted the invitation to come on March 8th.
After meetings with business and banking leaders, the Taoiseach reported widespread understanding for Ireland’s wish to adjust what he described as the “unfair” terms of Ireland’s EU-ECB-IMF bailout.
“The reputation of Ireland is exceptional internationally in what we have done in a short time,” said Mr Kenny. “I made the point that our economy is still very fragile and we need assistance committed to by our EU colleagues.”
Mr Noonan used yesterday’s meeting with Ms Lagarde to request high-level IMF involvement in plans to develop a “menu of options” for exiting the programme.
‘Backstop measures’
This plan, currently being developed by the Government with the European Commission, would include “backstop measures” to reassure markets, which he said may never be required.
“Ms Lagarde agreed that if you compared this January to last January things have stabilised,” he said.
“People appear to have been moving forward and countries are being repaired.”
Mr Kenny told a podium discussion – alongside the Italian, Dutch and Danish leaders – that €64 billion borrowed to rescue banks was a “crushing burden” on the Irish people. A successful completion of its EU-ECB-IMF bailout programme could serve as an example for Europe “that if a government works with its people and understands the patience of people that . . . results will flow”.
Funds invested in Ireland “had not been wasted”, he said, as proven by reform progress described as “fantastic” by Dutch prime minister Mark Rutte.
Centralised tax regime
Quizzed on whether he would support a shift towards a centralised tax regime, Mr Kenny said Ireland’s corporate tax regime was “clear and transparent”.
“Our tax regime is a national competence and it is not changing,” he said.
At his second Davos meeting, Mr Kenny said he sensed a greater sense of optimism and “realism” among participants
“Two years ago the discussion was of the break-up of the euro, exit from the euro zone,” he said.
“Cynics” who predicted a euro break-up or euro zone exits had been proven wrong, he said, and leaders had exceeded expectations with a permanent bailout fund. It was important now to show concrete progress on last June’s decision to break the link between banking and sovereign debt.
A senior European official, who asked not to be named, confirmed that “trust is building” towards Ireland and there was widespread agreement of the need, for Ireland and the entire euro area, for a smooth return to markets.
“The key issue is of financial stability in the euro area and that should be understood by all governments,” the official added. “We are doing it for Ireland but also for everyone.”
