Monday 20 February 2017

Ireland toasted by key EU chiefs as MEPs urge action over debt

Top ECB and commission officials return from holidays to angry grilling

Sarah Collins, in Brussels

Published 30/08/2011 | 05:00

ECB president Jean-Claude Trichet addressing the situation in the markets before the European Parliament's Economic and
Monetary Affairs Committee session in Brussels yesterday
ECB president Jean-Claude Trichet addressing the situation in the markets before the European Parliament's Economic and Monetary Affairs Committee session in Brussels yesterday

Ireland is being touted as the eurozone's good news story as leaders attempt to deflect attention from the bloc's burgeoning debt crisis.

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Jean-Claude Juncker, who chairs the monthly meetings of the 17 euro finance ministers, said yesterday that Ireland's benefactors were "very pleased" with the progress made since the country appealed for a €67.5bn loan from the EU and IMF last November.

"The eurozone suffers from the fact that we seem always to be going on about the bad news and talking all the time about that," said Mr Juncker, who is also the prime minister of Luxembourg.

Failed

"Ireland, as far as competitiveness is concerned, lost out very considerably, but has now caught up half of the ground that it lost," he said.

He and top officials from the ECB and commission returned from holiday yesterday to face a grilling by European parliamentarians angry at what they say is a slow and piecemeal approach to solving the bloc's debt crisis.

"We have failed to convince markets," said Polish finance minister Jan Rostowski, who attended the meeting as his country holds the EU's six-month rotating presidency.

The hearing came after weeks of turbulence on global debt and equity markets, which have been rocked by the US debt downgrade and put off by the seeming lack of progress following a July deal for a second Greek bailout and an overhaul of the eurozone's €440bn rescue fund.

EU economics chief Olli Rehn, who was also at the meeting, called for the immediate adoption of the July package, which includes €109bn in new financing for the beleaguered Greek government and an expanded role for the EU's financial stability facility to allow it to step into secondary markets to buy ailing countries' debt.

Unanimous approval -- in many cases by national parliaments -- is essential for the deal to take effect. Several parliaments, including those in Belgium, France and Germany, have said they are reconvening early to rush through a vote.

The ECB has been intervening in the interim, buying up Spanish and Italian debt as investors dump them over fears the countries won't be able to pay back their debts.

The bond purchase programme had lain dormant since March -- after €74bn spent on Greek, Irish and Portuguese bonds -- but the bank has spent an extra €40bn since it was revived this month.

However, ECB head Jean-Claude Trichet is keen to get the bonds off the bank's books, saying at the meeting that the purchases "cannot be used to circumvent the fundamental principle of budgetary discipline".

An attempt by the French and German leaders this month to forge an "economic government" was blasted by MEPs fearful that it would cause the EU to splinter. "The Franco-German cure is worse than the disease," said Italian MEP Gianni Pittella.

Irish Independent

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