Governor of the Central Bank Patrick Honohan has said he expects that talks between the International Monetary Fund, the European Central Bank and the European Commission, which begin in Dublin today, will result in a loan being offered to Ireland.
Opposition leaders have welcomed the clarity of his remarks.
The representatives of the IMF, the ECB and the Commission will discuss Ireland's four-year budgetary plan and the restructuring of the banking sector.
Speaking on RTÉ's Morning Ireland, Mr Honohan said the negotiations were not about a bailout, but would lead to a loan of tens of billions to Ireland, and that the Government would have to accept it.
'The intention is and the expectation is, on their part and personally on my part, that negotiations or discussions will be effective and a loan will be made available and drawn down as necessary,' Professor Honohan said.
He said he did not see the visit as a 'worrisome' event or something that would lead to a change in the Government's direction on the economy.
The Governor also said the IMF and ECB would not bring a big technical team to Dublin if they were not sure that a plan could be designed and agreed for the Irish economy.
Professor Honohan said the interest rate charged on any loans from the IMF/ECB will be roughly in line with previous IMF loans, but says the issue is complicated.
On the banks, he said the huge amounts of money put into them already have not yet generated sufficient confidence on international markets.
He said the banks will use any IMF/ECB money as contingent funding which can be shown to international investors but does not have to be used. The funds can be used as a buffer and come back out when they are not needed, as happened in the US in 2008.
Professor Honohan said there have been substantial outflows of deposits from the banks since April as large investment funds and institutions, which had invested in the Irish banks at the height of the economic boom and when the country had an AAA rating, decided to pull out when we lost that rating.
But he pointed out that all this was replaced by borrowings from the ECB. He said the banks have the facilities to deal with these outflows of money.
This afternoon, Taoiseach Brian Cowen said the Central Bank Governor is entitled to give his view of the outcome of talks with European officials and the IMF.
However, he said his responsibility is to get the best possible outcome for the country and taxpayers.
He denied he was talking in riddles and says he is discharging his job responsibly.
EC president says no pressure on Ireland
President of the European Commission José Manuel Barroso has said the Commission was not putting pressure on Ireland to resort to EU financial help, but added that it must act speedily due to a very specific problem in the banking sector.
The Taoiseach again insisted that the Government was not involved in negotiations on a bailout.
Today's talks follow two days of discussions in Brussels involving eurozone and EU finance ministers on a way forward for Ireland.
While the Government had attempted to draw a distinction between emergency aid for the banks and for the State, it is being reported this morning that there is now a reluctant acceptance that any funding for the banks will have to be drawn by the State.
A further priority will be to preserve Ireland's 12.5% corporation tax. But already there is pressure on that front with the Austrian finance minister saying there needed to be talks with the Irish Government about the issue.
However, Minister for Enterprise, Trade & Innovation Batt O'Keeffe has again insisted that Ireland's corporate tax rate is not an issue for consultation or negotiation as part of the talks with IMF and EU officials.
Meanwhile, Seán Power, Fianna Fáil TD for Kildare South, has said the Government failed the people by its inability to explain the current financial and economic situation.
Mr Power told the Dáil last night that a game of semantics was being played in the past week, which he said was a poor one for the Government.
He claimed ministers had treated people as if they could not understand the complexities of the financial situation that we are in
Re: Rumour Control ie the bailout/nonbailout of the Irish republic
Originally Posted by Louis VI the Fat
themselves that potentially FF wont accept the bailout a potential timebomb for Spain/Portugal/Greece/Italy.
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no Irish person bought them thats for sure.
at least thats what the elite will tell us.
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