EUROPEAN VIEW:THE EUROPEAN Commission has urged the Government and the Opposition parties to make good on their pledge to enact the Finance Bill before the Dáil is dissolved but indicated it sees little threat to the legislation.
In the hours before Minister for Finance Brian Lenihan met Opposition representatives for talks on the Bill, the official spokesman for economics commissioner Olli Rehn said the EU executive took note of the consensus between the major parties on the requirement to pass the legislation.
Privately, European officials said they were working on the assumption that the Bill would soon pass. In some accounts the subject of greater attention now is the extent to which a presumed future Fine Gael-Labour will push to renegotiate elements of the EU-IMF deal.
Officials insist there can be no change to the wider fiscal parameters of the package, although tentative talks are under way on a reduction of the interest rate on bailout loans released by the European Financial Stability Facility (EFSF), the euro zone rescue fund.
Separately, the EFSF said it will proceed today with a syndicated issue of bonds worth between €3 billion and €5 billion to fund rescue loans for Ireland. “The launch will be tomorrow, as planned,” said a spokesman.
This inaugural bond issue is seen as a crucial test for the rescue scheme established last May by euro zone governments. A key concern will be the rate of interest at which the bonds are sold, which will in turn determine the rate of interest that Ireland pays.
At a regular press briefing, Mr Rehn’s spokesman declined to comment on the turmoil that saw the Greens quit the coalition and Brian Cowen stand down as Fianna Fáil leader. He also saw no need to discuss what would happen if the Bill was not enacted.
“First of all, it will not surprise you the commission has no comment on what is essentially a domestic political discussion,” he said.
“Having said that I would just like to take note of a large consensus among political parties in Ireland to pass the Finance Bill through the Dáil before the election takes place, whenever that takes place.
“We are satisfied because we think this is important for Ireland’s stability and credibility that this Finance Bill is passed soon. As you know the Finance Bill is indeed crucial to ensuring that the 2011 Budget is implemented as it was agreed in the programme, the EU-IMF programme.”
Asked what would happen if the Bill did not go through the Dáil soon, the spokesman said he was not prepared to engage in discussions about such a “speculative” scenario or about the election campaign.
“As just said, we take note that according to statements we have seen over the last 24 hours there is a large consensus among political parties for this not to happen, so we remain confident,” he said.
“For the rest, it is a legitimate sovereign domestic political discussion and we have no intention to interfere.”
The question of reducing the interest rate has emerged amid a wider debate on far-reaching reforms to the EFSF’s scope and scale. Under discussion is whether the EFSF margin on rescue loans made to any bailout recipient is reduced, something which requires the approval from each of the 17 euro zone countries.
To secure an interest rate cut Ireland would have to demonstrate that it is fully meeting the obligations set out in the EU-IMF plan, said officials.
