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Ireland a 'shining example' in handling crisis -- Merkel


Taoiseach Enda Kenny and German Chancellor Angela Merkel

Taoiseach Enda Kenny and German Chancellor Angela Merkel

Taoiseach Enda Kenny and German Chancellor Angela Merkel

GERMAN chancellor Angela Merkel says Ireland is a "shining example" of how countries can emerge stronger from the economic crisis.

However, Dr Merkel did not give any more detail on any bank debt deal that may be done for Ireland, saying it was a matter for negotiation among eurozone finance ministers.

She was speaking after a bilateral meeting with Taoiseach Enda Kenny in Berlin, called in advance of Ireland's presidency of the EU next year.

Mr Kenny said the pair recommitted to their recent joint communique that Ireland is a "special case" and this would be taken into account in bank debt negotiations.

"The chancellor once again confirmed and affirmed her conviction that Ireland has a special case and should be treated as such in the work that is being undertaken by the eurogroup," Mr Kenny said.

It is understood Mr Kenny's main aim was to ensure Dr Merkel repeated her claim that Ireland is a special case on German soil, where it would be picked up by her domestic press and to copper-fasten her commitment.

The pair did not discuss the exact details of a bank debt deal during their hour-and-a-half- long meeting yesterday, since this is to be left to finance ministers.

Dr Merkel said the discussions were one of the reasons her finance minister, Wolfgang Schaeuble, met with Finance Minister Michael Noonan and Public Expenditure Minister Brendan Howlin in Dublin earlier this week.

"Ireland indeed is one of the shining examples of how Europe will emerge stronger from the crisis than it went in," she added.

"We want to support you, Germany wishes to help you. Bilaterally we have no problems whatsoever, we have a very close relationship, a very close friendship and this is what we wish to build on in the future."

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She also defended austerity policies, but said they had to be joined by growth and increased competitiveness in order to create more jobs.

"Look at what Ireland did. Budgetary consolidation, fiscal consolidation was one part of that.


"The other parts are structural reform or reform of the labour market, better possibilities, better opportunities for young people in particular to get jobs. And these are at least as important by way of reforms as what you have (with austerity).

"Last but not least, we can only be successful in the end in creating jobs if we are competitive enough as regards our products to be able to sell them on world markets.

"It's not an end it itself that we decided to adopt a strict policy of fiscal consolidation," she added.

"It is in a way an insurance for coming generations, for our children and our grandchildren, to be independent in our political decisions and this is why I am so convinced that this mix of measures for growth, for structural reforms for fiscal consolidation is the necessary one and is the right one."

Mr Kenny again repeated that European leaders should stick to the agreement reached at the EU summit on June 29, when it was agreed that banking debt should be split from sovereign debt.

Dr Merkel congratulated Mr Kenny on receiving a 'European of the Year' award from a group of German publishers, which he will collect when he returns to Berlin next week.

She said the award is "very justified. . . looking at what Ireland has been able to do over the past few years as regards the efforts put into reforms, into improving competitiveness".

Meanwhile, Finance Minister Michael Noonan told a meeting of accountants there was no reason to think the economy would not grow 0.75pc this year.

Comment: Brendan Keenan P25

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