Government has EU support over crisis, says Cowen

TAOISEACH BRIAN Cowen has said his administration has the confidence and trust of the European authorities to see Ireland through the economic crisis.

Although there is concern at very high levels of the EU institutions about the dramatic deterioration of Ireland’s position due to the rising cost of the Anglo Irish Bank rescue, Mr Cowen said there was no formal or informal discussion about the Irish situation at an EU summit yesterday.

He also sought to downplay the significance of renewed pressure on Irish borrowing costs, as the interest rate on 10-year money rose above 6 per cent yesterday. The premium demanded by lenders to the Irish Government rose to 3.7 per cent over the equivalent German bond.

The market movement had affected a number of countries, he told reporters. “There have been a number of countries – Spain and France – in the bond market today. I think that’s a reaction to the demand,” he said.

Mr Cowen said the resolution of Anglo Irish Bank would help to signal to the market the matter was in hand.

His comments came as Barclays Capital warned Ireland “may need to seek outside help” from either the EU or International Monetary Fund if there are additional financial-sector losses or the economy worsens. “At this juncture”, given the comfortable near-term liquidity position of the Irish treasury, there isn’t a need to draw on financial assistance, it said.

Mr Cowen said “no” twice when asked if there was any discussion about conditions in the economy in the light of the strains imposed by Anglo. “There was no discussion specifically on the Irish situation,” Mr Cowen said.

He noted, however, that European Central Bank chief Jean-Claude Trichet attended the meeting. “When the meeting ended, I spoke to him on the way out and thanked him for his continuing help and support. I acknowledged the work of the ECB as we go through the issues presently to finalise the resolution of the final figures that are being worked by our own authorities,” he said.

“Obviously, we’re very anxious to do everything we can, we take our responsibilities seriously in these matters, there’s no complacency as far as the Government is concerned. We are very anxious to ensure we have a sustainable position going forward and we are working with all the parties concerned as you know in relation to bringing a conclusion to the Anglo Irish Bank resolution.”

Mr Cowen said “yes” when asked whether his administration has the confidence and trust of the European authorities to see Ireland through the storm.

“We’re working very closely with them and as I say there is absolutely no room for complacency. We continue to monitor the situation as we prepare [to enter] now into the whole budget process . . . and we will continue to work closely with all of the authorities.”

The objective of the Government’s economic policy was to maintain stability to provide prospects for recovery, he said.