Spain and Italy seek better deal from €120bn jobs package
Spain and Italy were at the centre of contentious debate in Europe last night -- aside from the countries' football teams qualifying for the Euro 2012 final.
Italy beat Germany in the second semi-final but German Chancellor Angela Merkel is proving more difficult an obstacle as she continued to hold a hard line on any eurozone debt deal.
EU leaders are edging towards signing-off today on a €120bn jobs package for the troubled continent, although it's not clear how Ireland will benefit from the jobs plan.
However, Italy and Spain were understood to be blocking the growth pact to get a better deal on reducing the interest rate on their borrowings.
The main item on the agenda at a crucial summit in Brussels last night remained coming up with a way to provide immediate help for Spain and Italy, which are too big to bail out.
As the summit headed into the early hours of the morning, EU leaders continued to differ on solutions to the eurozone debt crisis as the economic situation in the two countries remained precarious.
European finance officials were working on urgent measures to ease market pressure.
Taoiseach Enda Kenny urged his counterparts to overcome their deep divisions and "focus on the immediacy" of the crisis gripping Spain and Italy.
"Spain has a liquidity problem, obviously its problem is different than Italy's problem, and Ireland of course has a legacy debt in respect of banking, which is critical for us," he said.
"Clearly this is an issue that the Council need to focus on and decide," he added.
European Council president Herman Van Rompuy will announce a €120bn growth initiative was nearing finality.
The package will consist of funding for structural fund, loans from the European Investment Bank (EIB) and specific bonds to fund infrastructure projects.
The head of the EIB will be in Dublin next week to meet with Finance Minister Michael Noonan to see if there is a way for Ireland to avail of the new funding.
The EU summit is also supposed to come up with a longer-term path out of the crisis.
The 27 EU leaders will discuss buying Spanish and Italian bonds to bring down borrowing costs.
The leaders will consider short-term measures to stem the debt turmoil as a plan to strengthen the eurozone's common currency and financial oversight ran into immediate opposition from Germany.
Chancellor Merkel has become increasingly isolated as new French President Francois Hollande, Italian Prime Minister Mario Monti and Spanish Premier Mariano Rajoy unite to push for quicker action to ease the crisis.
Mr Noonan accepted the focus should be on helping Spain's banks and reducing Italian interest rates on debt.
But Ms Merkel, who has rejected calls to investigate joint debt or do more to cut Spanish and Italian borrowing costs, said her focus will be on measures to boost economic growth.
Despite the German leaders firm stance, Mr Kenny is still hoping for EU agreement on eurozone countries clubbing together to borrow money, known as eurobonds.
Such a move would benefit Ireland substantially as it would make it easier to borrow.
He said often issues that were being ruled out ended up back on the table. "Europe is about patience and timing," he said.