Monday 24 October 2016

Taoiseach warns Greece deal has to make economic sense

Colm Kelpie in Brussels

Published 26/06/2015 | 02:30

IMF managing director Christine Lagarde and Finance Minister Michael Noonan and French Finance Minister Michel Sapin at the meeting in Brussels
IMF managing director Christine Lagarde and Finance Minister Michael Noonan and French Finance Minister Michel Sapin at the meeting in Brussels
Denmark's Prime Minister Helle Thorning Schmidt arrives at the European Union (EU) Council headquarters at the start of an EU leaders summit in Brussels.
Alexis Tsipras
Taoiseach Enda Kenny
Greek Prime Minister Alexis Tsipras, Italian Prime Minister Matteo Renzi and German Chancellor Angela Merkel share a joke before getting down to negotiations at the EU leaders' summit in Brussels

Taoiseach Enda Kenny has again ruled out support for writing off Greek debt but insists Ireland is in favour of giving Athens longer to pay down its loans from the Troika.

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As high-level EU talks failed to reach any deal last night, Mr Kenny said in Brussels that any proposals from Greece had to make economic sense.

"In Ireland's case, we did not increase income tax, we did not increase VAT, we did not increase PRSI, but we put up alternatives to those measures proposed in order to keep a pro-growth policy and make our country competitive, grow our economy and provide jobs for our people,'' he said.

A Government spokesman said the Taoiseach was in favour of debt "reprofiling" for Greece - extending the term of the loans but not writing them off.

In Dublin, Tánaiste Joan Burton last night reiterated Finance Minister Michael Noonan's view that debt relief would be "highly desirable'' for the Mediterranean state.

She said that for the sake of European solidarity, and for the future of Europe, a deal must be done.

"That deal won't happen unless both parties come to a realistic agreement,'' she said.

Ms Burton said Ireland lent Greece more than €300m and it wants the money back.

She said some form of debt relief, however, should occur.

"I think it would be highly desirable that we reach that point because the alternative is that Greece is allowed to drift away,'' Ms Burton said.

"I think it's probably inevitable that there will be another further arrangement with Greece, but it may take some time to come to that point. For the sake of the Greek people, I'd like to see it reached sooner rather than later.''

A Government spokesman said debt reprofiling - a form of debt relief - happened in Ireland's case through the promissory note deal.

Talks between Greece and its creditors failed to reach agreement again yesterday, with just days to go until the country needs to meet a crucial deadline to make a debt payment to the IMF and avoid a potentially damaging default.

Among unresolved disputes were Greek demands for debt restructuring, which several ministers have rejected, as well as differences over reforming Greece's pensions system.

Finance ministers from across the Eurozone held their fourth meeting in a week to break the impasse, but the talks concluded without agreement and preparations were being made to meet again tomorrow.

Without a deal by the end of the weekend, Greece could potentially default on a near €1.6bn payment to the IMF.

After five months of negotiations, the heads of the European Commission, ECB and IMF gave Prime Minister Alexis Tsipras an ultimatum to offer a reform plan by mid-morning yesterday, saying they would otherwise send their own version to the Eurogroup of Eurozone finance ministers.

Greece let the deadline slip, saying it stood by proposals it had submitted on Monday with some modifications.

The move came ahead of a summit of European leaders during which the migration crisis in Europe and the renegotiation of Britain's membership terms of the EU were set to be discussed.

Greece, however, looked likely to overshadow it.

European leaders last night spent two hours on an unscheduled discussion of the Greek crisis, appealing to Mr Tsipras to accept the proposals on the table and spare the Greek people worse suffering, EU officials said.

Mr Tsipras urged fellow leaders to take responsibility and not leave Greece's fate in the hands of the IMF, but they declined to intervene, saying the talks must be run by finance ministers.

Irish Independent

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