Friday 18 April 2014

EU chief Barroso: No backdated bank debt deal for Ireland

Barroso also blasted Ireland's economic collapse claiming euro was 'victim' of our problems

European Commission President Jose Manuel Barroso addresses a news conference during a European Union leaders summit in Brussels on Thursday. Photo: Reuters
European Commission President Jose Manuel Barroso addresses a news conference during a European Union leaders summit in Brussels on Thursday. Photo: Reuters

THE EU's top official last night blasted Ireland's economic collapse, claiming the euro currency was a "victim" of the problems caused by Ireland and ruled out a retrospective bank debt deal for Ireland.

Europe did not cause of the problems for Ireland; Ireland caused a problem for Europe, the head of the EU government said.

Following the bailout exit, the Government's bid to get backdated funding for the banking sector was dealt a spectacular blow as the head of the European Commission blamed the Irish banks, regulators and government for the difficulties in the country.

Categorically rejecting suggestions Ireland should now be helped by Europe, at least in the short to medium term, European Commission President Jose-Manuel Barroso cut loose on Ireland.

He added that a deal made by finance ministers earlier this week on a banking union  was "for the future" and was "not retroactive".

Mr Barroso the problems in the Irish banks caused a "major destabilisation" in the euro.

"I am saying this because it would be wrong to give the impression that Europe has created a problem for Ireland and now Europe has to help Ireland.

"In fact, it was the banking sector in Ireland - it was one of the biggest problems in the world in terms of banking stability what happened in Ireland. Let's be honest about this.

"Now, after this, the Irish authorities and Irish people made a great effort, that we very much admire, and thanks to that effort, that we very much admire, and also thanks to the effort of the other euro area countries and European institutions, Ireland was able top exit the programme," he said.

Mr Barroso congratulated Ireland on exiting the bailout.

But he pinned the blame for the crisis firmly on Ireland.

"But let's be clear about the responsibility, because sometimes not only in the Irish case, I hear its suggested the problem have been by created by the European Union or by the euro.

"It is exactly the opposite. The problems have been created in some countries because they did not observe the minimum prudence in terms of managing their banking or financial sector, in other countries, because they were not able to control the excessive debt. This is the case," he said.

"So the euro was not the cause of the problems of Ireland. The euro was a victim of the problems by some practice, irresponsible practices, in the financial sector, that I repeat were not the responsibility of the European Union that at that time had no competence of all in matters of supervision."

Fionnan Sheahan and Shona Murray

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