THE GERMAN finance minister who controversially suggested Ireland could not expect a retrospective bank debt deal will travel to Dublin today for a key meeting with his Irish counterpart Michael Noonan.
Mr Noonan and Minister for Public Expenditure and Reform Brendan Howlin will host Wolfgang Schäuble, who caused consternation last month when he said the European Stability Mechanism (ESM) should be used only for future bank recapitalisations.
Mr Schäuble will proceed to Britain this afternoon, where he is due to deliver a talk at Oxford University titled “Europe – Still a Common Vision?”
His meeting with the Irish Ministers is expected to last 1½ hours and will be held at Farmleigh rather than Government Buildings because the Dublin marathon is taking place. Ireland’s upcoming presidency of the EU will be on the agenda at the meeting.
Mr Noonan and Mr Howlin’s officials are continuing to work on the Government’s updated medium-term fiscal statement, a draft of which is to be presented to the Cabinet on Wednesday.
The statement, which has replaced the pre-budget outlook, will be the final fiscal document to be released by the Government before the budget on December 5th. It will set out projections on taxation and expenditure for the coming years and is expected to be published in the first week of November.
Labour backbenchers have called for a budgetary increase to the universal social charge (USC) for all individuals earning more than €100,000.
The USC is charged at 7 per cent of income for those earning more than €16,000, but self-employed people earning more than €100,000 pay a 3 per cent USC surcharge.
Arthur Spring and Joanna Tuffy said the “unfair anomaly” facing the self-employed should be removed and all those earning more than €100,000 should pay USC at 10 per cent.
In response to a parliamentary question, Mr Noonan confirmed such a move would bring at least €71 million into the exchequer every year.
“The estimated yield is based on confining the extension of the 3 per cent rate to the portion of income which is in excess of €100,000, that is, the increase is not applied to the portion of total income earned up to €100,000,” Mr Noonan explained.
Mr Schäuble, along with his Dutch and Finnish counterparts, called into question the scope of plans for the ESM fund to recapitalise banks.
However, hopes for a deal on Ireland’s bank debt rose after a joint statement was released by Taoiseach Enda Kenny and German chancellor Angela Merkel, stating the “unique circumstances” of Ireland’s economic crisis required a special approach.
