Merkel ally praises Ireland for sticking to austerity
GERMANY's deputy finance minister has heaped praise on Ireland for its commitment to austerity.
Steffen Kampeter – an ally of Chancellor Angela Merkel – publicly backed Ireland's efforts to tackle the economic crisis in an article for an influential banking magazine.
Mr Kampeter, one of the secretaries of state at the powerful Federal Finance Ministry in Berlin, lauded Ireland for its "serious economic reform coupled with budgetary prudence".
In 'Euroweek' magazine, Mr Kampeter said that the markets now backed Ireland.
He wrote: "Market sentiment towards the sovereign Irish signature has turned around and improved considerably and it is our view that the Irish example shows the way."
The German politician, a member of parliament for Ms Merkel's centre-right Christian Democrats, also wrote about Germany's financial position in Europe.
He said that his country was the "key contributor to the common effort to reverse the crisis of confidence in Europe".
Ireland was the only other country praised in the German minister's lengthy commentary.
But credit ratings agency Moody's has refused to lift its negative view on the credit outlook for Ireland, blaming not only the crisis in Cyprus but factors at home, including its belief that not enough homes here are being repossessed by the banks.
Mr Kampeter throws his weight behind austerity as the main way to fight the economic crisis. A lasting solution to the eurozone's debt crisis, he said, would come from fiscal and structural adjustments in each member state. Mr Kampeter backed cost-cutting and the shrinking of banks.
He added: "In fact, while the extraordinary policy measures bought time to solve the problems, they have done so at a cost. This implies that if the time bought was not used effectively to solve the issues at stake, we would be worse off."