TAOISEACH ENDA Kenny will make the case for greater flexibility in Ireland’s EU/IMF reform programme when he meets chancellor Angela Merkel in Berlin today.
Senior officials said Mr Kenny will use talks with Dr Merkel and finance minister Wolfgang Schäuble to “sensitise” them to the need maintain public support for reforms ahead of tough budget cuts.
Over a working lunch, the German leader will outline her proposals for treaty change, allowing EU oversight of national budgets. Under German proposals, euro zone members countries breaching euro zone debt rules should, in future, go before the European Court.
Both sides have framed today’s talks as a political quid pro quo. Ms Merkel can present Ireland to her electorate as proof that, despite the ongoing Greek drama, euro zone bailouts are not always a case of throwing good money after bad.
Mr Kenny, meanwhile, hopes to explain the continued burden to Irish taxpayers of the bailout programme. Ahead of looming budget cuts, the Taoiseach will stress the importance of being able to react to new economic realities.
“Irish taxpayers have paid a huge price in propping up the banks in the interest of Irish and EU stability,” said a senior Government source “We have carried a huge burden. But there is still a risk and potential further liability . . . If we could get an indication of support particularly in relation to the banking system, the trip would be worthwhile.”
Neither side is expected to use the talks to go into technical details – either of the EU-IMF programme or the European Financial Stability Facility loan facility. However, Irish sources expressed optimism that looming reform of the EU bailout fund will result in more favourable terms on Irish loans.
German officials said they were “aware of persistent, low-level pressure to renegotiate programme terms”, but said no announcements could be expected today.
Regarding Ms Merkel’s proposals for treaty change, Irish officials said they were aware of the German domestic background to the debate. But, from an Irish perspective, it is “not obvious at this point in time how it resolves the financial crisis”. “The Taoiseach wants to listen to her narrative and her explanation about what kind of treaty changes she has in mind and what role it will have in solving the crisis,” said a senior official.
Meanwhile, former EU commissioner Mario Monti confirmed he is likely to present a new Italian government for a vote of confidence in both houses of parliament by the end of the week. After difficult negotiations, Mr Monti said he believed he has parliamentary support for his administration to succeed that of Silvio Berlusconi, who resigned last Friday.