The EU summit
The crucial two-day meeting at the Justus Lipsius Building, in Brussels, will be Enda Kenny’s second time in Brussels as Taoiseach. He locked horns with a truculent President Nicolas Sarkozy, of France, over our corporate-tax rate the last time, and observers expect this outing to be no less tense.
The key element from an Irish perspective is the possibility of an interest-rate reduction on the bailout loan. Ongoing stress tests on Irish banks, which will not be completed before the summit, are a further matter of concern to the Government.
Leaving aside the immediate question of the interest rate, the Government believes these tests will necessitate a significant amount of new capital for the banks. It fears that such recapitilisations, added to the burden of the rising national debt, may prove unsustainable.
This summit is primarily concerned with expanding the scale and scope of the euro-zone bailout fund. The temporary fund will be in place until 2013, after which a new permanent bailout scheme will take its place. The summit will attempt to carve out a definitive political agreement on the mandate for the permanent fund.
In addition, the situation in Japan will be discussed, as well as further anxiety surrounding the turmoil in the Arab world and disagreement about military intervention in Libya.
As if this were not enough, political ructions in Portugal have raised the prospect that it may not be able to survive without a bailout for much longer.
