Eurozone ministers meet to discuss Irish crisis, EU president warns it could trigger bloc ‘collapse.’
The Irish government Tuesday urged its fellow eurozone members to “stand firm” in the face of the “irrational” behavior of participants in the international bond markets, according to the ‘Wall Street Journal.’ Finance ministers from the 16 members of the eurozone were to hold their regular monthly meeting in Brussels later Tuesday, and are to be joined by the other 11 members of the European Union Wednesday for a gathering known as Ecofin.
Some have urged Ireland to accept financial help from the EU and the International Monetary Fund in order to reassure investors that it can repay its debts, calm government bonds markets and prevent the euro from coming under pressure on foreign exchange markets. But speaking to BBC radio, Ireland’s Minister for European Affairs once again repeated the government’s claim that it doesn’t need financial help, and said finance ministers “mustn’t panic.” “There is no reason to trigger a bailout from the EU or the IMF,” Dick Roche said. Roche said that the government has already made big cuts to spending, and will make further cuts next year that will ensure it meets its target of cutting the budget deficit to 3% of gross domestic product in 2014 from 32% of GDP this year.
“Ireland has made absolutely massive adjustments,” he said. “No other country has taken that kind of adjustment.” Roche also repeated the government’s claim that it has enough money to fund itself without new bond sales until the middle of next year, and said that investors shouldn’t be demanding such high yields to hold Irish government bonds.
Meanwhile, however, EU president Herman Van Rompuy warned that the Union faces a ‘survival crisis’, with the risk of contagion spreading from Ireland across the continent, according to ‘The Guardian.’ “We’re in a survival crisis,” Van Rompuy said in a speech in Brussels. “We all have to work together in order to survive with the eurozone, because if we don’t survive with the eurozone we will not survive with the European Union.”
EP FAILS TO REACH DEAL ON 2011 BUDGET
The European Parliament yesterday failed to reach an agreement on the Union’s budget for 2011. In a press release, EP president Jerzy Buzek said: “We wanted a deal, but I regret that a few Member States closed the door to the 2011 budget agreement. The intransigence of a few Member States in the Council undermines the confidence of our citizens that the EU is working effectively. I warned the Council several times not to throw the baby out with the bathwater.
Unfortunately for European citizens, they have just done that.” The EC will now have to present a new draft budget, the document said.