EU leaders to discuss eurobonds, says Kenny

A PROPOSAL for joint borrowing by EU states through the creation of eurobonds is under consideration by European leaders, according to Taoiseach Enda Kenny.

Speaking before he attended last night’s informal dinner of EU heads of government, Mr Kenny confirmed eurobonds would be on the table for discussion by the leaders. However, it was just one of a range of opportunities for creating growth that would be discussed at the summit, he said.

Tánaiste Eamon Gilmore said eurobonds would be on the agenda, but that discussions were at a very early stage and it remained to be seen what progress would be made on the issue.

While decisions were not expected at this meeting, it would lead to more formal occasions where decisions could be made, Mr Kenny said. Asked whether he supported the creation of eurobonds, he said “we should explore what it actually means”.

Eurobonds would reduce the cost of servicing Ireland’s debt but is opposed by Germany, which argues that it would remove the incentive for indebted countries to put their finances in order.

Both the Taoiseach and Tánaiste sought to play down hopes of a firm outcome from the summit but insisted it would advance the “growth agenda”.

Mr Kenny expressed opposition to any plan to introduce a financial transaction tax, as this would be to Ireland’s disadvantage. A proposal to use the European Stability Mechanism to recapitalise the banks, however, would be of interest to Ireland.

The continuing membership of Greece in the euro zone was a matter of considerable concern for European leaders, Mr Kenny added. However, this wasn’t the real issue for this summit.

The Tánaiste said the summit would give added urgency to the growth agenda for Europe but would not result in firm proposals at this stage. Speaking in Brussels prior to the meeting, Mr Gilmore played down hopes of a concrete outcome but insisted it would accelerate progress towards the tabling of growth proposals. Asked whether Ireland would need a second bailout, Mr Gilmore insisted the country was on track to re-enter the financial markets at the end of 2013 after the bailout programme was completed.

He said Ireland had made its targets under the programme and was in discussion with the troika about ways its bank debt could be re-engineered to the benefit of the Irish taxpayer.

The Labour leader was speaking after a meeting with EU economics commissioner Olli Rehn and before entering a meeting of European socialist leaders. He described his meeting with Mr Rehn as very positive and said progress had been made in discussions about the conditions for a growth and development stimulus package for the Irish economy.

These proposals were being worked upon, though there was no specific timetable, he said. Firmer proposals are unlikely to be ready in advance of the May 31st vote on the fiscal treaty, he indicated.

The Tánaiste met Mr Kenny later in the afternoon before the Taoiseach met EPP (European People’s Party) leaders and later attended the informal dinner of heads of government hosted by president of the European Council Herman van Rompuy.

Mr Gilmore said he expected the meeting to accelerate progress in widening the role of the European Investment Bank and reusing structural funds to address youth unemployment.

He acknowledged that Ireland has used up its share of structural funds but said ways would have to be found to “reharness” remaining funds in other ways.

“Ireland supports these initiatives that will help to grow the European economy because that means additional investment in Ireland,” he said.