LONDON (MNI) – EU Economic Affairs Commissioner Olli Rehn says that
the EU stands ready to act promptly should it receive a request from
Ireland for aid.

“We stand ready to act, we have instruments to do that, we do not
need to discuss for a long time about new tools, we have the tools to
give an answer if we receive a question…”.

Rehn said that technical talks with the Irish government are
presently focusing on the fiscal dimension and on the banking sector.

“Technical talks are focused on two main streams. The first
dimension is on the fiscal dimension and is focusing on the four-year
fiscal plan…”

Rehn said he expected Ireland to present its four-year plan
“shortly”. Irish Premier Brian Cowen said Tuesday that he hoped to
present this by next Monday.

“In the meantime, since the beginning of last week, the Irish
government has been finalising the work concerning the four-year plan,
my understanding is the Irish government will shortly present this. This
fiscal plan really has to deliver the 3% deficit target by 2014,
starting with a front-loaded part of fiscal consolidation worth 6bln
euro in 2011″.

The banking sector would be another focus of the talks, Rehn said:

“The second stream is obviously the state of the banking sector and
the need for restructuring the banking sector, here we will cover the
whole sector so we will see what are the real needs and what are the
best means to see a viable and healthy banking sector in Ireland”.

Belgium’s Finance Minister and the current ECOFIN Chairman Didier
Reynders acknowledged liquidity issues in the Irish banking sector and
said that these would be analysed by a troika of the EU Commission, the
European Central Bank and the International Monetary Fund in coming
days.

“…So don’t ask what could be the solution. But you have seen that
it was possible for the Irish government to organize some
recapitalization of the banking sector”.

Commissioner Rehn noted that the European Financial Stability
Facility could not provide aid directly for the banking sector of any
country but only via a country programme.

Any such programme could have a “very strong emphasis on the
restructuring of the banking sector”.

— London newsroom: 00 44 20 7862 7495; ukeditorial@marketnews.com

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