BRUSSELS (MNI) – Ireland’s fiscal and budgetary situation is
specific to Ireland and no analogies can be made to other Eurozone
countries, a European Commission spokesman said on Monday.
Ireland confirmed late Sunday that it has requested formal talks
with the IMF, ECB and EU, the so-called troika, to negotiate the terms
of an aid deal, which will come with strict conditionality. Some
policymakers have expressed concern that, if not addressed, market fears
about Ireland could spread to other high debt and deficit Eurozone
countries, such as Spain or Portugal.
“No analogies can be made,” the spokesman told reporters at a
regular meeting. The “Irish case is very specific,” he said.
The spokesman said the steps to shore up Ireland were being taken
to safeguard the financial stability of the Eurozone and the European
Union “but we don’t determine the markets’ reaction.”
He said the exact shouldering of the burden was still to be
decided, with some EU member states who are not in the Eurozone offering
to aid Ireland.
“Two member states of the EU – namely the UK and Sweden – have
already indicated that they stand ready to consider a bilateral loan,”
the spokesman said. “Others could join this bilateral effort, and it
remains to be seen how the figure will be spread among the
participants,” he said.
Slower than expected growth and the cost of bailing out its banking
system will push Ireland’s budget deficit to 32% of its GDP this year.
The Irish government has committed to getting the deficit below the EU’s
3% limit by 2014. Stripping out the banks, the deficit will be around
11.9% this year, still one of the largest in the Eurozone.
Work on an Irish aid deal is due to be completed by the end of the
month.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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