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Tuesday 23 September 2014

Worst of eurozone crisis is over, says German finance minister

Maeve Dineen Business Editor

Published 28/12/2012 | 05:00

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Wolfgang Schaeuble

THE worst of the eurozone sovereign debt crisis is over, according to German finance minister Wolfgang Schaeuble.

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In an interview to be published today, Mr Schaeuble said governments in heavily indebted countries such as Ireland and Greece have recognised that the crisis that began in Athens three years ago will only be overcome by implementing bitter reform measures.

"I believe the worst is past," he told the German daily newspaper 'Bild' in comments released ahead of publication.

"The government in Athens knows that it cannot financially overburden other eurozone countries. They are thus pushing forward with the reforms," he said.

Having just passed our sixth austerity budget, the Government here will be hoping Mr Schaeuble is right when he says the worst is now over.

Top of the Coalition's agenda for 2013 is securing a deal on our bank debt. European leaders will decide by June, the scale of the writedown on Ireland's €32bn debt for bailing out AIB, Bank of Ireland and Permanent TSB. Discussions on the writedown are running alongside talks on the restructuring of the €31bn promissory note issued to Ireland to cover the cost of bailing out IBRC – formerly Anglo Irish bank and Irish Nationwide.

Prospects

A deal on both elements of the bank debt is crucial for Ireland's success in returning to the markets and exiting the IMF- EU bailout.

Mr Schaeuble also said he was optimistic about France's efforts to stop its debt burden expanding.

"I am certain that France will fulfil its obligations," he said.

"The government definitely knows that every country has to permanently pursue reforms to remain competitive."

Credit agency Moody's downgraded France earlier this month, stripping it of its prized AAA rating, amid concerns over its prospects for economic growth and its exposure to Europe's financial crisis.

Mr Schaeuble appeared more optimistic than German Chancellor Angela Merkel, who, earlier this month, said she could not "completely" declare the crisis over.

Irish Independent

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