EU plays down Irish Republic bail-out talks
- 17 November 2010
- From the section Business
European finance ministers have met in Brussels, but say they did not hold detailed discussions on a potential bail-out for the Irish Republic.
Didier Reynders, who chaired the talks, said the situation was not addressed because the Irish government had not requested financial help.
"There's no reason to ask all the participants for an answer because we did not receive a question," he said.
But he stressed that the EU was "ready to act" if needed.
Mr Reynders, the Belgian finance minister, was chairing the meeting of the Economic and Financial Affairs Council (Ecofin), on behalf of the Belgian presidency.
He said that there were differences between the Irish situation and the position Greece found itself in earlier this year, when it received an EU-IMF rescue package.
"This time we're concerned about a country, but there's no request from that country," he said.
"It's a major difference between this case and the Greece case because we have instruments [to act]," he added.
He also said that it was difficult for the European Central Bank (ECB) to go further in the provision of liquidity to Irish banks.
Once known as the "Celtic tiger" because of the strength of its economic boom, the Republic has since suffered the deepest recession of any country in the developed world, including collapsing property prices and a deeply-indebted banking sector.
EU economic and monetary affairs commissioner Olli Rehn said the Irish government was committed to the technical discussions taking place with the EU, the ECB and the International Monetary Fund (IMF).
These discussions focus on the plan to reduce the budget deficit over the next four years and to stabilise the banking sector.
"The Irish authorities are commited to intensify this work," he said.
Mr Rehn also sought to clarify the situation regarding Greece's bail-out, following concerns raised by Austria that Greece had not fulfilled its obligations under the EU-backed aid package, as well as reports that Austria had yet to submit its December contribution to the bail-out.
"A decision on the third instalment for Greece should be taken in December by the 14 participating euro area member states that participate in the loan scheme. But the disbursement has always been seen for January next year," he said.
"The decision is in December, the disbursement in January, so there is no delay."
'Ready to support'
There have been reports that the UK is considering offering billions of pounds of direct loans to the Irish Republic.
However, a spokesman for the UK Treasury said: "There has been no application from Ireland and we are not speculating on the situation."
But Chancellor George Osborne said the UK was "ready to support Ireland", as he arrived for the Ecofin meeting.
"We're going to do what is in Britain's national interest," he said.
"Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system."
After the meeting, Mr Reynders said: "On the UK [providing assistance] nothing prevents people going further bilaterally or otherwise, but it's far too early to be talking about anything before a request has come from the particualr country."
The Irish government has repeatedly denied that it is seeking outside support. Prime Minister Brian Cowen has said that he has not asked for bail-out money and that the Irish economy is well funded until next year.
An EU handout would be seen as a big loss of face for the Republic - essentially meaning that its survival and solvency was reliant on Brussels.
'Accent on banking'
Mr Rehn revealed on Tuesday that plans were being made for a potential rescue programme, should the Irish government ask for help.
Tuesday's meeting of eurozone ministers and financial institutions came against a background of renewed financial market turmoil.
At the centre of this has been the markets' fear that the governments of the weaker eurozone countries - particularly the Irish Republic - cannot afford to repay their huge debts.
He told reporters that potential rescue plans would have an "accent on restructuring its banking sector".
A statement issued after the meeting praised the Republic of Ireland's efforts to combat its problems: "The Eurogroup welcomes the significant efforts of Ireland to deal with the challenges it faces in the budgetary, competitiveness and financial sector areas."