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Thursday 21 September 2017

Bid for better bailout deal as Troika jets in

IRELAND'S bid for a better deal for its €63bn bank bailout will be raised with the EU/IMF/ECB Troika which started a 10-day visit to Dublin today.

The three-man team is back in the city on one of its three-monthly visits to review Ireland's implementation of the bailout programme for the last quarter of 2011.

The Troika will meet with Finance Minister Michael Noonan, trade unions, NAMA and other interested bodies as part of their inspection of Ireland's public finances.

Taoiseach Enda Kenny has made it a Government priority to try to secure lower interest rates and a longer payback period for the €63bn borrowed to bail out the banks.

Panic

The visit came as a top economist said he believes Ireland should negotiate a "standby" bailout from the EU/IMF/ECB to kick in if we cannot return to the money markets by next year.

Willem Buiter, chief economist of Citigroup, said if Ireland returned to the markets now, it would borrow at a rate of 8pc. Ireland is paying 3pc under the current bailout terms.

"Borrowing at 8pc when you can borrow at 3pc doesn't sound like good business," Mr Buiter said.

Ireland should set up the deal in advance not "in a state of near panic at the last minute," he said.

In a significant development in the Eurozone crisis yesterday, France and Germany said they have agreed on the "principle" of a financial transaction tax in Europe, but bilateral talks in Berlin failed to bridge differences in a timetable for its introduction.

German chancellor Angela Merkel said there was a "good chance" of agreement on an intergovernmental fiscal compact later this month, while French President Nicholas Sarkozy said he will push for a financial transaction tax by the end of the month, adding it was "scandalous" such a tax did not already exist.

The Government said it had no objection in principle to such a tax but only if it was applied on the widest possible basis.

Meanwhile, the Taoiseach is to meet British Prime Minister David Cameron in Downing Street on Thursday to discuss the ongoing Eurozone crisis.

It will be the second bilateral meeting between the two in a month and comes as observers said Ireland has substantial concerns about the impact a fiscal compact which excluded Britain would have on Ireland's relationship with its biggest trading partner.

Mr Kenny, speaking in Westport, said a central focus of the Government's strategy at the meeting of European leaders later this month would be to prevent a widening rift between Britain and the group of states backing tight new rules.

It should be "clearly understood that Britain is an essential part of the European Union and that the European Union needs Britain insofar as full membership is concerned", he said.

Read Dan White, P14

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