Europe’s finance ministers are to hold more talks on the Irish debt crisis as experts prepare for a possible bail-out – even though Dublin insists it does not need help.
Negotiations between the 16 eurozone countries ended in Brussels on Tuesday night with praise for the Republic’s own economic recovery efforts and gentle pressure on the Government to accept “preparations” for a bail-out programme.
The 16 will be joined by the remaining EU finance ministers, including UK Chancellor George Osborne, who is said to be considering the offer of billions of pounds of bilateral British aid to the Republic.
A British Treasury spokesman refused to confirm reports in the Financial Times, stating: “There has been no application from Ireland and we are not speculating on the situation.”
After Tuesday night’s eurozone talks, EU Economics and Monetary Affairs Commissioner Olli Rehn said the Irish representatives had made a commitment to work with the EU, the European Central Bank – which is already supporting Irish banks with cheap loans – and the IMF, in a bid to placate jittery financial markets.
He said the meeting had resulted in “an intensification of preparations of a potential programme in case it is requested and in case it is necessary”.
But Finance Minister Brian Lenihan will repeat at the talks what he told the eurozone on Tuesday – that Dublin is not seeking any bail-out and is working nationally to restore its economy, with a tough budget to be published soon, and with a four-year recovery programme to be unveiled within days.
Mr Lenihan said the Government was not under pressure to strike a deal with Europe by a certain time.
“We have not set deadlines on this but it is urgent and focused,” he told RTE Radio. “And I just want to make one thing clear. The European Central Bank is firmly behind the Irish banking system. There are no funding difficulties in the Irish banking system.
“The European Central Bank has stood fully behind the system. What is important is that we look at the structural problems in the system and address them and that’s what this is about.”