IRELAND IS on target to meet the conditions of the €85 billion EU-IMF agreement and has “got over the first jump”, Minister for Finance Michael Noonan has said.
Under a revised memorandum of understanding with the troika of international organisations funding the bailout, the minimum wage will be restored to €8.65 from €7.65 and the “quid pro quo for that is we will reduce employer PRSI on the tranche of income up to the maximum level of the minimum wage” with the reduction at 50 per cent.
Mr Noonan also told a press conference in Dublin yesterday that the National Asset Management Agency (Nama) would not now be taking over loans with a value under €20 million. He said “scrapping Nama 2 is in the programme for government”. He said a developer “might have a small housing estate in Letterkenny, a block of flats in Tuam and a small commercial outlet in Skibbereen” and be dealing with different bank managers. “In terms of servicing the debt and deleveraging it, the Europeans didn’t have the concept that it was so scattered and not as centralised as they would have experience of”. He said that once it was explained, the troika accepted the Government’s position.
He said the international organisations “have approved of our banking recapitalisation and they strongly approve of the restructuring and they have endorsed the stress-test mechanism and agree it’s quite conservative and they don’t expect further shortfalls”.
Mr Noonan said “we’ve got over the first jump. They’ve agreed we’ve met the conditions of the first quarter and they’re prepared to reorganise the conditions of the second quarter.”
The revised conditions will be signed off on May 15th-16th because the negotiators have to “refer back to their principals”.
“In terms of renegotiating the programme, we have done what we said we would do. We have exchanged conditions we disagree with in the memorandum of understanding with conditions we wanted to be included,” he said.
Minister for Public Expenditure and Reform Brendan Howlin said, “We’ve made a series of important and real decisions and there is an expectation among the general public that this Government would make decisions and not procrastinate on issues that are important.”
The international partners had accepted the Government’s fiscal goals “as real”. He said it was also important to “establish a relationship with people who are going to be part of our landscape for the next little while”.
The Minister for Finance said Ireland’s external partners had accepted the “argument and reasoning” behind the Government’s jobs initiative programme. “We have gone into a lot of detail with them. It must be fiscally neutral”.
The initiative will be unveiled in the Dáil in May but, pressed as to whether it would mean further tax increases and austerity, Mr Noonan said that while the jobs initiative was of a budgetary nature “the word ‘budget’ has connotations of pain and suffering and no wonder given our recent experiences of budgets. So we’re trying to signal that this is something different.” Tax increases were “not the impetus of what we’re doing. We’re trying to change the way things are done across a range of activities so that jobs are created and confidence is built up.”
Mr Howlin said the troika had approved very strongly of the review of public expenditure which was already under way. Stressing that the review of the joint labour committees was not linked to the minimum wage changes, he said it was “part of the general issue of looking at any impediments to the creation and maintenance of jobs”.
He stressed that they were also looking at other sectors, including “more competition in the professional areas among lawyers” and in the medical profession, allowing a chance to remove “barriers in the past to true competition that have caused price inflation”.
