Business World

Thursday 19 April 2018

Kenny emphasises importance of growth as austerity begins to bite

Donal O'Donovan and Sarah Collins

TAOISEACH Enda Kenny talked up growth and the "digital agenda" while euro leaders battled over Greek debt.

There was no new deal for Ireland on the table in Brussels last night but the Government tried to use yesterday's crisis talks to push its credentials as "the good bailout story".

In closed sessions with other leaders, Mr Kenny called for a bigger emphasis on growth and jobs as a counter balance to the austerity measures that dominate the euro bailout programmes. He found an ally in IMF boss Christine Lagarde, who is understood to have also emphasised the need for growth in the euro area if debts are to be absorbed in the long term.

Mr Kenny also pushed Ireland's credentials as a leader in terms of the digital economy, as he pursued a clear strategy of trying to separate Ireland and Greece in the minds of his fellow heads of government, the public and investors.

There was no sign of that paying off yet, and Irish plans got a setback when a French proposal to boost the size and activities of the euro bailout fund was blocked.

President Nicolas Sarkozy wanted the European Central Bank to help recapitalise banks and countries.

Irish strategists hoped that would mean an opportunity to cut the €3bn-a-year cost of propping up the bailed-out Anglo Irish Bank. But last night the plan looked like a non-runner. The big news yesterday was banks that loaned money to the Greek government will lose half their investment or more when a deal on Greece is completed, probably on Wednesday.

That's certain to unsettle potential lenders to Ireland.

But Government sources at the talks said it would be "crazy" for Ireland to seek a similar write-off.

"The Greeks are facing a 25pc cut in public service pensions, incomes above €5,000 per year are being brought into the tax net, it's a dire situation for Greece not a let-off," a senior source said. .

Irish Independent

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