Barroso to discuss bail-out with Irish opposition
Leaders of Fine Gael, Ireland’s main opposition party, are to meet José Manuel Barroso, the president of the European Commission, today.
Opinion polls indicate that Fine Gael will be the largest party in Ireland after the general election, expected to take place on 25 February.
Enda Kenny, the party’s leader, and Michael Noonan, the finance spokesman, will meet Barroso later today. They will discuss the reopening of negotiations on the interest rate that Ireland pays on its EU loans.
As part of renegotiating the deal, the party has suggested it would draw up an amendment to the Irish constitution to introduce a “debt brake” clause, which would prohibit budget deficits above a certain level.
Angela Merkel, Germany’s chancellor, is believed to favour such measures as part of a “comprehensive package” being worked on by member states to improve fiscal governance in the eurozone. She hinted that countries with such clauses in their constitution could receive more favourable lending terms from the European Financial Stability Facility (EFSF).
However, a leading member of the European Central Bank (ECB) last night appeared to rule out the likelihood of Ireland being able to renegotiate its loan interest rates.
Lorenzo Bini Smaghi, a member of the ECB executive board, told RTE, the Irish state broadcaster: “It doesn’t happen when you have a change of government, the next government reneges on commitments.
“It’s not in line with the procedures, and this would be to give Ireland preferential treatment. We try to apply equal treatment to everybody so I think this is an issue of fairness.”
Ireland is paying a rate of approximately 6% to borrow from the EFSF.
Kenny said: “Michael Noonan and I welcome this opportunity to meet the president of the European Commission.
“Fine Gael in government is committed to changing the policy measures contained in the EU/ECB/IMF funding programme and to negotiating with our European partners to reduce the penal interest rate that Ireland is being charged.”
The issue of Ireland’s borrowing rate is expected to be raised when EU leaders meet in Brussels on February 4.
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