GOVERNMENT MINISTERS continued to play down the likelihood of a bailout after the Cabinet had formally decided to begin discussions with the IMF and EU, new documents show.
A schedule of Cabinet records released to The Irish Times shows that a memorandum for Government regarding the “minister for finance’s engagement with the IMF, ECB and European Commission” was discussed at a meeting on Tuesday, November 16th.
At the same meeting, documents also refer to a “Government decision (secret) re: minister’s further engagement with IMF, ECB and European Commission.”
However, Government ministers, including then taoiseach Brian Cowen, denied at the time that any negotiations were taking place over a potential bailout.
While ministers Dermot Ahern and Noel Dempsey said there was no basis for such reports on Monday, November 15th, describing them as “fiction”, the denials continued up until Wednesday, when Mr Cowen once again played down the reports.
“The statement made by ministers over the weekend were based on the fact that we were not in negotiations [over a rescue package], and we’re still not involved in negotiations,” Mr Cowen told the Dáil on Wednesday, November 17th.
By this stage, officials from the “troika” of the EU, IMF and European Central Bank were already in Dublin to discuss the possibility of a bailout with government officials.
The government formally applied for a programme of financial assistance from the IMF and EU three days later on Sunday, November 21st.
The eventual rescue package was worth a total of €85 billion, with the State providing €17.5 billion, including €10 billion from the National Pension Reserve Fund.
A schedule of Department of Finance records relating to the EU-IMF deal were released under the Freedom of Information Act.
While the content of most records were not disclosed, the schedule shows the timing of key meetings, as well as correspondence between the governor of the Central Bank Patrick Honohan regarding the EU-IMF financial programme for Ireland.
The only formal written contact between Mr Honohan and the then minister for finance Brian Lenihan referred to in the schedule is a letter regarding the package of financial assistance which was sent on November 21st, 2010.
This is despite the fact that the governor had spoken on national radio on several days earlier – on Thursday, November 18th – saying that he expected there would be an aid package amounting to tens of billions of euro.
A number of members of the Cabinet who were present for last November’s meetings were unavailable for comment yesterday.
However, in remarks made last December, after he announced he would not be contesting the general election, Dermot Ahern said his “conscience was clear” about denying speculation the State was seeking a bailout prior to the confirmation of the EU-IMF rescue package.
In advance of speaking to the media, he said he had telephoned Mr Lenihan and then Mr Cowen to ask them about stories in that day’s newspapers.
“There was no question of any bailout or any talk of bailout in any of those conversations I had,” he said.
Mr Ahern said there was no discussion about such matters at Cabinet meetings until Tuesday, November 16th, when Mr Lenihan was delegated to begin initial discussions about the possibility of making an application.
After the bailout was formally agreed last year, Mr Lenihan also defended his reluctance to concede that a bailout was inevitable.
“I had to protect the position of the Irish taxpayer and the Irish State and, in that connection, it was very important that matters were clarified before we made any formal application,” he told reporters.
Mr Lenihan said he was given a mandate by Cabinet to negotiate a possible bailout with the EU on Tuesday, November 17th. He then went to the euro group meeting of finance ministers in Brussels that evening.
A statement was issued after that meeting that a team should go immediately to Dublin to examine the situation.
