Business Irish

Wednesday 7 December 2016

Ireland’s borrowing plans could be scuppered by Greece

Independent.ie reporters

Published 07/06/2011 | 15:04

European Commission president Jose Manuel Barroso welcomed bin Laden's death as a 'major achievement'
European Commission president Jose Manuel Barroso welcomed bin Laden's death as a 'major achievement'

Ireland’s plans to return to financial markets next year could be derailed by the deepening crisis in Greece, the president of the European Commission has warned.

  • Go To

"We have seen in the past that, in fact, sometimes the markets react not only to a situation in one country, but they make some kind of generalisation, and so in fact some risks exist," Jose Manuel Barroso said earlier today.

"That's an additional reason to work with our partners in Greece, for them to, of course, go ahead with the necessary reforms and the fiscal consolidation efforts."

Under current plans, the Government is expecting that Ireland will begin to return to financial markets to borrow money next year rather than relying on the EU-IMF loans.

Mr Barroso was speaking as the European Commission issued recommendations to all 27 EU governments on their budget programmes for the next 12 to 18 months.

Mr Barroso said the region’s economy is “at a critical juncture” as it faces “many uncertainties.”

“The recovery is gaining ground, but it is very uneven across the continent,” he added.

Meanwhile, the European Central Bank (ECB) has exposure to struggling eurozone economies like Ireland, of around €444bn, according to think-tank Open Europe.

Open Europe has also suggested the eurozone crisis could drive the ECB itself into insolvency, in a new report.

“The ECB’s attempts to paper over the cracks in the eurozone may have temporarily softened the impact of the crisis, but have exacerbated the situation in the long-term,” said director, Mats Persson.

He added that the real risk is that these assets will face radical write-downs in future with eurozone governments and banks teetering on the edge of bankruptcy.”

Open Europe claims that overall, the ECB is currently leveraged around 23 to 24 times, with only €82bn in capital and reserves.

Read More

Promoted articles

Editors Choice

Also in Business