Ireland 'must compromise' on bailout

Ireland must "give" before it can receive better terms on its bailout package, Austrian finance minister Josef Proell has said.

"If Ireland wants concessions, it has to do something for it," Mr Proell told reporters in Brussels today.

"Greece has demonstrated this. The Greeks have to generate €50 billion from privatisations for the extension of the loans. Now we're waiting what the Irish government can do in return for their plea. It's a give and take."

European Union economic and monetary affairs commissioner Olli Rehn has encouraged Ireland to adopt a constructive approach in talks on its corporate tax rate.

Euro area leaders last week rebuffed Taoiseach Enda Kenny's bid for easier bailout terms, demanding that Ireland raise its corporate tax rate in return, as they rewarded Greece with a cut in its rescue loan costs.

Mr Kenny, attending his first summit as Ireland's leader, refused to buckle under pressure from Germany and France as he pushed for relief on the 5.8 per cent interest rate the country pays on the €85 billion rescue package it received in November.

Minister for Finance Michael Noonan said Ireland can't seek to re-negotiate the terms of its rescue package until the central bank completes stress tests to determine whether the nation's lenders need new capital.

"It's not reasonable to expect definite proposals or agreements while the stress tests are continuing," Mr Noonan said yesterday in Brussels after meeting EU officials, including ECB president Jean-Claude Trichet and Mr Rehn. He would be "surprised" if the €10 billion initially earmarked as part of the bailout to recapitalise the banks will be enough, he said.

Stress tests on Ireland's banks are due by the end of the month, and Mr Rehn said he disagreed with the Government's assessment that more than €10 billion may be needed.

Bloomberg