€1bn loan to Ireland 'an act of solidarity'

 

SWEDISH VIEW:IRELAND HAS no choice but to cut public spending and raise taxes, Swedish prime minister Frank Reinfeldt said yesterday in London, adding that work on a €1 billion loan to Ireland was not yet complete.

“In early 1990s we had enormous programmes for raising taxes, lowering costs. That is the only way to go,” he said. “That is what is now facing the Irish people. I understand they know this and they are unhappy about it because they were not warned. But it is the only way to do it.”

Following a meeting in Downing Street with British prime minister David Cameron, Mr Reinfeldt said Sweden was prepared to come to Ireland’s aid – even though the Swedish economy has little exposure to Ireland – because it “is an act of solidarity to stick together”.

Later, Mr Reinfeldt criticised German chancellor Angela Merkel, though he did not mention her by name, for her declaration that bondholders would have to accept losses, saying Sweden was “not very happy with the signal which was a bit unclear”.

“I hope that it can be more clarified in the upcoming European Council . . . It is also very clear if you send a signal that you might change the assets value, the ones keeping those assets will be nervous. I hope that we have a clear decision that does not create uncertainty after the December council.”

Meanwhile, Mr Cameron rowed back on comments on Wednesday when he said the UK could face a dramatic rise in immigration by Irish people seeking work in the UK if the Irish economy falters.

Questioned about his remarks in Downing Street, Mr Cameron yesterday said he wanted to “very much applaud” the Irish Government’s efforts to bring the budget under control.

“I think we should let them get on with the job . . . There is a huge amount of migration both ways and that is something that we welcome. But I think we should give Ireland the chance of growing out of the situation.”