Gilmore warning over Greek effect

 

The European Union should ensure there was effective communication of any implications for other countries in finalising a solution for Greece, Minister for Foreign Affairs Eamon Gilmore said today.

"Once again, it is important for us to emphasis that Ireland's programme is on track, and important for our partners to ensure that, along with a solution for Greece, we produce a clear and stable policy environment for programme countries,'' he added.

Mr Gilmore, who was giving the State of the Nation address to the Institute of International and European Affairs in Dublin, said Ireland must shoulder its fair share of the blame for the union's serious difficulties.

He said that a profound failure of economic management during the boom, and a series of policy errors after the boom came to an end, had placed Ireland in need of external assistance.

"Having accepted our share of the blame for creating the problem, it should also be acknowledged that Ireland is now doing its part to contribute to a solution,'' he added.

"The new Government has taken a series of decisive actions in respect of the banking system that have set the banks on course to recovery.''

Credit ratings agency Standard & Poor's cast new uncertainty today over euro zone efforts to rescue debt-crippled Greece by warning it would treat a French bank plan for a rollover of privately-held debt as a default.

The threat abruptly ended a relief rally in stock and bond markets after Greece adopted a new, tougher austerity plan last week, prompting euro zone finance ministers to agree on Saturday to throw Athens a €12 billion short-term lifeline.

Bank stocks fell in Europe and the cost of insuring Greek debt against default resumed an inexorable climb only briefly interrupted last week when the Greek parliament backed a new wave of spending cuts, tax rises and public asset sales.

Investors fear that a default by Greece, which has seen violent protests against austerity, would send shock waves through the world finance system with some analysts saying it could call the whole euro zone into question.