Article by Micheál Martin in El Pais 11/04/2010
The original is here:
elpais.com/articulo/economia … geco_8/Tes
Translation below via Google Translate
Avances en la recuperación de Irlanda
MICHEÁL MARTIN 11/04/2010
Ireland, like Spain and many other European countries, is facing difficult challenges in consolidating public finances and ensure a sustainable and stable future growth. This will be the key to the next meeting of Finance Ministers Madrid under the Spanish Presidency of the EU.
In Ireland, with the successful launch of the bank recapitalization plan, the publication of the Bill for the Reform of Central Bank and the agreement reached with public service unions, the Government has made significant progress this week on the road economic recovery. We have a three-pronged strategy aimed at: to stabilize public finances to repair the banking system, and improve competitiveness and promote sustainable employment.
The agreement on the transformation of public service includes proposals on wages until 2014, a downsizing and restructuring of the service in order to reduce costs and maximize performance. The implementation of this agreement will contribute to a climate of industrial relations more stable the country out of the global economic downturn.
The Government has acted quickly to address regulatory weaknesses that surfaced following the global economic and financial crisis. Have been appointed a new Central Bank governor and a new financial regulator and the draft Law for the Reform of the Central Bank will strengthen the responsibilities of the same and parliamentary oversight, thus safeguarding the interests of consumers and investors.
The announcement this week by the financial regulator that banks are required to maintain capital reserves of 8% is in line with international practice. It is one of the main ways to measure the financial strength of a bank, financial regulator said, and put an end to the banking crisis. Central Bank Governor has said that these costs will be manageable and bearable for the state.
No doubt that this has been sloppy banking practices with banks to lend recklessly real estate. But the new National Agency for the Management of Assets (NAMA), established by the Government of Ireland and adopted by the European Commission, will ensure security, stability and capacity of the Irish banking system. NAMA withdraw assets increased risk of banking. Has begun the process of transferring loans that meet the requirements from designated financial institutions. We expect to complete this process at the end of the year with the transfer of assets by some 80,000 million euros.
NAMA is buying the first segment of these loans with a 47% discount on the original amount of 16,000 million. Some of these losses will be covered by the banks themselves increasing public capital and selling assets. But the inescapable reality is that the state will also have to inject capital. Difficult to accept a burden on the shoulders of taxpayers, but that must be addressed to ensure a functioning banking system and can give loans to small businesses and lift the country out of recession. The Government has set specific targets for banks will force them to give credit facilities to SMEs.
In the last two years, we have made budget adjustments equivalent to 7.5% of GDP and these difficult decisions have given us fiscal credibility to address the banking problems. We have engendered confidence in our economy on the international scene and reaped the benefits of fall in the cost of borrowing. Irish budgetary policy in the crisis has been approved by many, including EC, ECB, OECD and IMF.
It is expected that the economy returns to growth in the second half of this year, by arranging banks, our economy will grow faster. During the period 2011 to 2014, our GDP is expected to grow by an average 4% per annum and this growth will be driven by exports. In fact, latest figures show that the country had a surplus of more than 38,000 million last year.
The factors that facilitated our recent economic success remain. Ireland is still a very interesting place for business. We are in the EU and the Eurozone with full access to the European Internal Market. We have young workforce, highly trained and flexible, and a favorable tax regime for business, an open economy and export-oriented approach for the company. The global economy is improving and we hope to take advantage of the upturn. Our economy is very flexible and has a good history of rapid adaptation.
Micheál Martin es ministro de Asuntos Exteriores de Irlanda.