Belfast Telegraph

Funding more bailouts 'reasonable'

Tanaiste Eamon Gilmore has said it is not unreasonable for Ireland to commit 1.27 billion euro to a pot of European emergency funds.

Even though the initial sum will be paid regardless of the referendum result, Mr Gilmore defended plans which could ultimately cost the country 11 billion euro.

The Labour leader said it is not unreasonable for member states to contribute to the European Stability Mechanism (ESM) bailout fund.

"The euro needs to have a supporting mechanism, a supporting fund which is an emergency fund for the members of the eurozone," said Mr Gilmore. "That's what the ESM is about. It's not unreasonable. I think it's important that every country that is a member of the euro contributes to that."

The ESM is expected to be worth around 700 billion euro after the European countries that have signed up to the stability treaty make their individual contributions.

Ireland will commit itself to giving 1.6% of the total ESM fund: around 11 billion euro. However, the Tanaiste insisted not all this money will need to be handed over.

Ireland will pay 1.27 billion euro to the fund in five equal instalments over the next three years, working out at around 254 million euro a go. It will be forced to pay the remainder of the 11 billion euro sum if a member state calls upon the ESM in an emergency bailout situation.

A Department of Finance spokesman confirmed that the initial 1.27 billion euro Ireland is due to pay will make up a European target of 80 billion euro. Having shored up a collective 80 billion euro from the 25 states that are expected to have ratified the preceding stability treaty, the fund can then enter international markets and aim to raise up to 700 billion euro.

Mr Gilmore said: "The primary issue for Ireland is that we want to have access to it if we need it and if the treaty is defeated, we will not have access to it."

However, People Before Profit TD Richard Boyd Barrett, one of the most outspoken opponents to the stability treaty, argued that Ireland should not have to pay money into a pot if it votes against the fiscal deal in the May 31 referendum.


From Belfast Telegraph