Europe will consider looking at any 'realistic' requests for bank debt relief
Published 19/06/2014 | 18:13
EUROPE will consider looking at any ''realistic'' requests for bank debt relief, one of the EU's most powerful finance ministers has said.
But while it was still technically possible for Ireland to tap Europe's bailout pot to pay for some of the crippling cost of bailing out the banks, it would be politically difficult, Jeroen Dijsselbloem, Dutch Finance Minister and head of the 18 member Eurogroup said.
He also said the €60bn cap placed on the European Stability Mechanism (ESM) for direct bank recapitalisation could place constraints on what can be done.
Last week, all 18 members of the eurozone, including Ireland, reached an agreement which means the ESM "firewall" will be available to provide direct aid to banks if needed by November.
''The next step is to complete the parliamentary procedures to get it up and running, and then we'll see if there are any realistic requests from member states to use the instrument,'' Mr Dijsselbloem told reporters in Luxembourg today.
It comes a day after Finance Minister Michael Noonan signalled major difficulties in securing a bank debt deal from the EU, admitting ''things have changed dramatically in Europe''.
Mr Dijsselbloem was speaking at the launch of the ESM's 2013 annual report, which showed that Ireland secured a saving of 0.4pc last year via the loans provided by the European Financial Stability Facility and ESM.
This was based on an estimated comparison of how much interest Ireland would have had to pay on the markets if there was no disruption, versus the bailout loan interest rates.
The annual report also said that the Government needs to maintain the reform momentum.
''As the government deficit and debt remain high, Ireland requires a fiscal policy consistent with fiscal targets set in the Stability and Growth Pact. Structural reforms shall boost competitiveness and support the solid growth rates necessary for public debt adjustment,'' it said.