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Monday 5 December 2016

Greek aid package to take priority at talks

Sarah Collins in Brussels

Published 25/03/2010 | 05:00

European Central Bank president Jean-Claude Trichet. Photo: Bloomberg News
European Central Bank president Jean-Claude Trichet. Photo: Bloomberg News

Taoiseach Brian Cowen is arriving in Brussels today for an EU summit that should be focusing on the bloc's long-term economic growth but will instead be overtaken by Greek tragedy.

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It was still unclear last night whether Mr Cowen would be called on to take part in snap eurozone talks ahead of the summit on a mooted aid package for Greece, which the European Commission is pushing leaders to approve this week.

The money would come in the form of bilateral loans from any of the 16 countries in the single currency zone (bar Greece).

European Central Bank president Jean-Claude Trichet, who is expected to attend the main summit, has said that any eurozone loans will be "non-concessional", meaning they will be offered at above-average interest rates.

The aid, which was signed up to in principle by Finance Minister Brian Lenihan and 14 of his eurozone counterparts earlier this month, has caused a rift with German chancellor Angela Merkel, whose country, the EU's largest economy, would be tapped for the most cash.

She is opposed to making premature aid pledges, and wants more of the burden to fall on the IMF, into which all EU members pay. But the EU executive has said that it wants a "European solution" to problems involving the euro.

The IMF is known for requiring stringent budget cuts of its debtor countries, and Brussels is not keen to see the US-based fund have too much influence over eurozone fiscal policy.

Burden

Greece is currently shouldering a debt burden worth 120pc of its economic output and must raise around €50bn more this year to pay off its creditors.

Meanwhile, Mr Cowen will also have to decide if he will sign Ireland up to the growth and jobs targets the commission suggested earlier this month.

Britain and Germany are loath to agree to the goals so soon, and want to wait until they have had time to debate them at home.

Irish Independent

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