Ireland to exit bailout without extra credit line

The Government has announced Ireland is to exit the EU/IMF bailout without a precautionary credit line.

The decision was finalised at a cabinet meeting held this morning.

Last week, the Troika concluded its 12th and final visit ahead of Ireland's exit from the bailout programme.

Ireland is due to leave the bailout on 15 December.

Speaking in the Dáil, Taoiseach Enda Kenny said it was "the right decision for Ireland."

"We will exit the bailout in a strong position," he told TDs.

The Taoiseach said Ireland was now in a position to fund itself on the markets and that the National Treasury Management Agency had built up a cash reserve of more than €20bn.

"We still have a long way to travel but clearly we are moving in the right direction," he added.

The Taoiseach said Chancellor Angela Merkel has asked German development bank KFW to work with Irish and German authorities to discuss ways to improve Ireland's funding mechanisms.

"I have spoken on a number of occasions with Chancellor Merkel. She confirmed that this (post-bailout credit line) was a decision for Ireland to make."

Mr Kenny said the move will not mean any windfall of cash for the country, or that Ireland's economic challenges are over.

He described the announcement as a "significant step" towards economic recovery. 

"Never again will our country's fortunes be sacrificed through greed and short-term gain," he said.

Minister for Finance Michael Noonan told RTÉ News the decision was in Ireland's best interests, and that he hoped to publish the main outlines of a medium-term economic strategy before Christmas.

He said he had taken advice from many colleagues, including the German government, but had never asked for support.

Mr Noonan briefed the Cabinet in advance of a meeting of eurozone finance ministers in Brussels.

The Department of Finance said confidence and sentiment towards Ireland has improved considerably in recent months and domestic and international economic conditions were also improving.

Good day for Ireland - Olli Rehn

European Commission Vice-President Olli Rehn described the announcement as a "good day for Ireland and the Irish people."

In a statement, Mr Rehn said the EC had made clear it would support Ireland in whatever decision was taken.

"Graduation from the programme will send a very clear signal to markets and international lenders that the adjustment effort undertaken in Ireland, with the support of its European and international partners, has paid off.

"Ireland has accumulated significant cash buffers under the programme, helped by the decision taken earlier this year by European creditors to extend the maturities on loans granted to Ireland," he said.

The decision has also been welcomed by the German government.

It said today was an important day for Ireland and the eurozone and it was now time for this country to return to the markets without the need for further credit support.

Gilmore hails move as 'historic' announcement

Tánaiste Eamon Gilmore told the Dáil it was an "historic, important and welcome" announcement.

However, the Labour leader added: "There will be no celebration until our economic fortunes are fully recovered."

Mr Gilmore said the renegotiation of bailout interest rates and the Anglo promissory note were among the reasons Ireland can cleanly exit the bailout.

Fianna Fáil leader Micheál Martin said a case should be presented by the Government on why Ireland does not need a precautionary credit line.

He also said there was no need for a "stage managed" announcement in the Dáil.

The party's finance spokesperson Michael McGrath said it would have been prudent and sensible to negotiate an insurance policy of credit.

Speaking to RTÉ's News at One programme, the Fianna Fáil deputy said the French economy was contracting, Germany's economy was slowing down and the ECB has further cut interest rates.

"We are now entering quite an uncertain phase. Yes we have a substantial buffer of cash but you don't want to run down to such an extent that you have only a few months left," he said. 

Sinn Féin President Gerry Adams welcomed the move but said the Government should not applaud itself for decimating public services and leaving families across the state in poverty.

Independent TD Stephen Donnelly described it as a "bittersweet moment" for Ireland and stressed the need for retrospective capitalisation.  

Deputy Shane Ross said the bond markets would require as much austerity as the Government has been imposing at the whim of the Troika.

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