Lenihan says EU and IMF had no input into plan

TODAY’S FOUR-YEAR economic plan was all the Government’s work, Minister for Finance Brian Lenihan told the Dáil last night.

Mr Lenihan also said the Opposition parties would be briefed later this week on the IMF-EU talks with the Government.

“The plan is the Government’s view . . . and the Government’s own view about how the economic and social position can be developed regarding growth, expenditure, taxation, fiscal controls in the next four years,” he added.

“So it is an assessment by the Government. There was no consultation with either the EU Commission or the IMF about the content of that document.”

Mr Lenihan, who was speaking during a debate on last Sunday’s meeting of European finance ministers, said that while the document had been shown to the representatives of the international organisations, this was not done to elicit their views on possible changes.

Fine Gael’s Brian Hayes said an essential part of the IMF-EU negotiations would be the interest rate to be paid for the loan facility.

The facility provided to Greece was 5 per cent, he said, adding that Ireland’s position was significantly better.

“Surely we should be paying significantly less than 5 per cent?” Mr Hayes added.

Mr Lenihan said the interest rate was a crucial part of the negotiations.

One of the difficulties for Greece, he added, was that the funding was for a short term.

“Considerations that determine the appropriate rate of interest do vary enormously, depending on whether it is short-term . . . three years, six years or nine years,” he added.

Mr Hayes asked if it was fair to say that Ireland would be paying less than Greece.

Mr Lenihan said he would not enter into the substance of the negotiations on the issue.

“I am simply pointing out that, in relation to Greece, an arrangement was made for three-year money which was very disadvantageous for Greece,” he added.

“Plainly, we do not want such an arrangement for Ireland.” He said that, in general terms, long-term money gave greater security. “It is also important to bear in mind that in the case of Greece, it was facing an immediate funding wall for what I can describe as the Greek exchequer,” he added.

Labour’s Pat Rabbitte warned that the Dáil could not be put on a “permanent election footing for 12 or 14 weeks in the present climate”.

He said Mr Lenihan must be honest about his department’s capacity to produce a finance Bill in the wake of a budget, if it was passed by the House.

Mr Rabbitte asked why the Opposition was not consulted and involved in the IMF-EU discussions, given that there was to be an anticipated general election.

Mr Lenihan said he understood it was intended to brief the Opposition parties later this week on the issues involved in the negotiations.

“That is the intention in relation to the European authorities and the IMF,” he said.

“I agree with you, Deputy Rabbitte, it is very important that the Opposition parties are put in the picture here.” Mr Lenihan said he was satisfied the Government had the “political capacity” to pass the budget and deal with the necessary consequential measures.

He added that there were always a finance Bill and a social welfare Bill following a budget, and he could not rule out other items of essential legislation which might be required.