IRELAND IS unlikely to be able to borrow from the international markets on a “sustainable basis” if there is a No vote on the referendum, the Dáil has heard.
Minister for Finance Michael Noonan said the National Treasury Management Agency (NTMA) had advised him that a No vote in the referendum “would mean in all likelihood that it would not be possible for Ireland to re-enter the bond markets at sustainable rates”.
He said it was not clear what other source of funding would be available if the fiscal treaty was rejected “with the resulting loss of access to the ESM [European Stability Mechanism]”. Mr Noonan told Fianna Fáil finance spokesman Michael McGrath that the International Monetary Fund had “indicated that it will provide funding to Ireland only as part of a European initiative”.
Mr McGrath had asked if the funding options for Ireland at the end of the EU-IMF programme were either to borrow substantially on the markets or have access to ESM funding.
The Fianna Fáil spokesman said that by the second half of next year Ireland would have to identify “with certainty how the country will be funded on exiting the EU-IMF programme”. He said Ireland would need €36 billion in 2014 and 2015 to ensure the country was fully funded.
The Cork South Central TD said the rate being charged on the bailout programme was about 3.5 per cent, while the markets “when I checked at lunchtime, are charging 7.35 per cent on a nine-year government bond”.
Mr Noonan said he had consulted the NTMA, which manages the State’s funding “and I consider that a No vote on the referendum on the stability treaty would mean in all likelihood that it would not be possible for Ireland to re-enter the bond markets at sustainable rates”.
Later Mr McGrath called for the National Asset Management Agency (Nama) to sell assets on the open market. “We should insist on the principle and the Minister should exercise political judgment on the issue and not allow Nama enter into private deals,” he added.
Mr Noonan said Nama was an independent organisation established under law by the Oireachtas.
“It is a criminal offence for anyone, including the Minister for Finance, to try to steer or influence a commercial decision being made by Nama,” he added.
“Nama is accountable and, for example, it must produce quarterly reports.” He said the agency was amenable to scrutiny by the Committee of Public Accounts, and its chairman and chief executive could be called before the committee in the normal way.
Mr Noonan said the Nama report on the last quarter of last year would be published today.
Mr McGrath raised the issue of transparency in the agency following the sale of a 450-acre land bank outside Cork city, which he said had been completed without the property being put on the open market.
“On further investigation, it appears this is not an unusual occurrence. Nama is hiding behind a facade, appearing not to be the seller even though it is pulling all the strings,” he said.
He said there was “something very wrong when Nama cannot tell us how many of the 663 sales it has completed have been put on the open market”. He called on the Minister to ensure all properties were put on the open market to ensure all interested parties could submit bids on a fair basis.
But, insisting he could not interfere, Mr Noonan said there was accountability and TDs should exercise it. “The Comptroller and Auditor General, under law, has a special auditing relationship with Nama, and he and his team can go into Nama and examine every piece of paper in there to see if everything was done properly and appropriately.”
