By David Barwick

BRUSSELS (MNI) – There are no serious grounds yet to think that
Spain’s GDP figures for the years 2007-2009 were wrong, Eurogroup head
Jean-Claude Juncker told Market News International on Thursday.

His comment comes after Spanish sovereign debt was hit earlier in
the day by an “anonymous tip-off” posted on the Financial Times’
Alphaville blog, which cited alleged “discrepancies” in Spanish GDP data
that had purportedly understated the decline in Spain’s economic growth
from 2007 to 2009.

“I have to wait for the exam to be given to these [GDP] figures by
the [European] Commission and by others in order to be able to assess
these figures,” Juncker said. “But I don’t have any serious elements
leading me to consider that these figures would be wrong.”

Speaking on the margins of the Informal Ecofin conference here,
Juncker also said he did not “think that Ireland will have to use the
[European Financial Stability] Fund.”

Rather, “I do think that this terrible situation that the Irish
government and the Irish people have to face can be resolved without any
help of the European Stability Facility,” he added. “I really do think
that we can be confident in the commitment taken by the Irish government
to present in a short amount of time a multi-annual adjustment program
which will have an effect, if correctly implemented, to bring down the
budget deficit under 3% in 2014.”

Juncker said he “was convinced” by the presentation made today by
Ireland’s finance minister Brian Lenihan about the country’s difficult
situation. “And not only because I am an old friend of the Irish,”
Juncker said. “I must say that I am suffering with the Irish people,
because the cost put on their shoulders is a very heavy one. But I’m
confident that the Irish will come out of this situation.”

Lenihan earlier today outlined Dublin’s updated bank bailout plans,
which could cost the government up to E40 billion. He also sought to
reassure worried senior creditors of the troubled lender Anglo-Irish
Bank, and he acknowledged that the government would need to consider
possible new austerity measures in light of the new bank-related costs.

Juncker said he thought the EFSF should be allowed to expire after
three years as planned. “I do think that in the long run we’ll have the
need to establish a permanent crisis mechanism, but this cannot be done
under the existing Treaty,” he said.

He noted that when the EFSF was founded, officials agreed it would
only be for three years. “That was the decision taken when the mechanism
was launched and we cannot break this commitment we have taken in our
national parliaments.”

–Frankfurt bureau tel.: +49-69 720142. Email: dbarwick@marketnews.com

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