Ireland is 'banjaxed' after IMF deal announced
Angry reaction from opposition parties
The Irish Government has said the purpose of the external financial support is to return the economy to sustainable growth. The €85 billion bail-out, or rescue package, will ensure Ireland has a functioning banking system.
Ireland will contribute €17.5 billion, from the National Pension Reserve Fund (NPRF) and other resources. The bail-out itself will include €35 billion to support the failing Irish bank system, €10 billion for recapitalization and €25 billion, which will be provided on a contingency basis.
Joan Burton, of the Irish Labour Party, said that the Europeans and International Monetary Fund (IMF) had "played better poker" than Ireland. She claimed that the Irish government had gambled away assets such as the pension reserve fund in the discussions. "The EU and IMF have us where they want us," she said.
Speaking to Ireland’s national broadcaster, RTÉ, she said “we are being asked to put up front ... all the assets we have as a country.” She added that when our cash reserves run dry “trap has closed on Ireland and we are banjaxed.”
Labour Party Leader, Eamon Gilmore, described the bailout as a sell out of the Irish taxpayer. He claimed that the IMF and EU had walked over a weak Irish Government and the Irish tax payers had now been dealt a debt that is unsustainable.
He believes that the NPRF will short change pensioners of the future. Mr Gilmore also said that the extension of the deadline for deficit reduction illustrated that the Government are not confident that the deal will work.
Michael Noonan, the Finance Spokesperson for the Fine Gael Party said that the opposition parties had been made aware that a contribution would come out the NPRF saying that this was, at least, money that “we won’t have to be borrowing elsewhere”.
Although, he said, the deal was as expect he still believes that interest rate, of 5.8 percent, is too high.
He called it a “a peculiar arrangement where there's a subsidiary fund against losses attached to this - so to get €100 you can use, you must borrow €120 and pay interest on the lot.'
Mr Noonan said that pitch the rate so high would force Ireland back to the bond market.
In a statement issued by Mr Noonan he said “The Government has been out-bid and out-negotiated at every turn. For some reason the Government decided to play it soft, and allowed the IMF, the EU and the ECB to win hands down.'
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