Wednesday 22 November 2017

Holland and Austria join ranks against easing terms of EU bailout

Austrian Chancellor Werner Faymann. Photo: Getty Images
Austrian Chancellor Werner Faymann. Photo: Getty Images
Thomas Molloy

Thomas Molloy

AUSTRIA, Holland and two powerful German states yesterday joined the growing chorus of countries to publicly oppose easing conditions of bailouts sought by Ireland and Greece.

Austrian Chancellor Werner Faymann said in Vienna yesterday that he's "against changing the existing agreements", while Finance Minister Josef Proell added that "I don't see pressure from other EU countries to change the bailout terms".

Later the same day, Dutch Finance Minister Jan Kees de Jager rejected a substantial cut to the interest rate for the EU's loans to Ireland and Greece. Finland has already said much the same thing.

"If you want to substantially influence the debt position of a country in the coming years, you'll need to reduce the interest rate substantially, which takes away the incentive for countries to prevent using the emergency fund," Mr De Jager said yesterday.

The two leaders are the latest to rebuff Enda Kenny and did so less than three weeks before a crucial meeting where Mr Kenny will try to persuade European partners to relax the terms of their portion of the €85bn bailout package.

Powerful

Mr Kenny got a cool response from fellow European centre-right leaders at a summit in Helsinki last week, where he was told that there would be "no free lunches".

Meanwhile, two powerful German states that both have bigger populations than Ireland and which are governed by German Chancellor Angela Merkel's party demanded a say in shaping the euro area's response to the debt crisis -- raising a potential hurdle to any attempt to pass additional measures in the German parliament or Bundestag.

The state governments in Hesse, whose biggest city is Frankfurt; and Baden-Wuerttemberg, which holds elections on March 27; rejected paying more into a permanent crisis mechanism now being forged, saying they want to influence policy at an early stage to temper any drain on their budgets.

States such as Hesse weren't "satisfied reading in the papers what the government plans", European Affairs and Justice Minister Joerg-Uwe Hahn said. Germany's 16 states "must be closely involved" in shaping the European Union's rescue facility, said Willi Staechele, the finance minister in Baden-Wuerttemberg.

Irish Independent

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