A WIDER discussion of the European debt crisis will be to Ireland’s advantage rather than dealing with difficulties on a country-by-country basis, Tánaiste Eamon Gilmore has said.
He favoured the issuing of euro bonds as one option for dealing with the crisis, which will be discussed at the emergency summit on Thursday of EU leaders.
Other issues to be considered at the summit include the interest rate on loans and the length of time for their maturity.
There will also be discussions around a possible establishment of a European ratings agency, “rather than having essentially private institutions whose connections and interests we don’t know anything about, effectively pronouncing on the creditworthiness of sovereign countries”, he said.
Speaking on RTÉ's This Week, Mr Gilmore welcomed comments by EU commissioner Olli Rehn in which he called for a cut in the interest rates on Ireland's bailout loans and for an extension to the repayment date on Irish debt.
The European Central Bank “are slower in coming to that conclusion but I think that gradually what is happening is that the European Union as a whole is coming to that point of view”.
He said European finance ministers agreed last week they would “stand ready” to take whatever steps are necessary to address the problems facing the euro.
Writing in yesterday's Sunday Business Post, Mr Rehn added that given the recent market reactions, it was clear that Ireland "cannot return to the market very soon".
He said that markets were extrapolating difficulties in Greece to Ireland and other countries in an “unjustifiable way”, making it difficult for Ireland to borrow in the international markets soon.
“The undeniable difficulties encountered in the Greek assistance program should not be generalized,” said Mr Rehn.
Mr Rehn said Ireland was “putting its house in order” and there were no new “negative surprises about the country”.
Meanwhile, Klaus Regling, head of the EU bailout fund, the European Financial Stability Facility, said Germans were profiting from the fund on the interest being made on the bailout loans to Ireland and Portugal.
"To date there has been only profit for the Germans. We are getting interest from Ireland and Portugal that lie above our refinancing costs," he told the German newspaper Frankfurter Allgemeine Sonntagszeitung.
“The difference flows into the federal budget. This is the reward for Germany giving guarantees.”
A bailout of Italy is “not on the table at the moment” and the country’s savings plan is “pretty convincing”, he said.
Mr Gilmore acknowledged that addressing issues in relation to individual countries like Ireland was not on the EU agenda.
However, he insisted that it “is to our advantage that the agenda has moved on from particular countries to a wider understanding and a wider discussion of the European problem”.
He added: “That, we believe, will work to our advantage rather than having it dealt with on a country by country basis”.
The issue of Ireland’s corporation tax was now off the agenda, he believed. “I don’t think there is any government in Europe that now believes that Ireland will now change its corporation tax rate” and the “reason why we won’t change the rate is also understood”.
Minister of State Lucinda Creighton said serious consideration should be given to the introduction of euro bonds. The idea of national governments pooling debt instruments could be a positive development, she said.
“For Ireland, they could be immensely important because it would allow us borrow on the international markets at sustainable interest rates,” she said.
