IRISH REACTION:TAOISEACH ENDA Kenny has said he is not surprised the Greek government has decided to put the rescue package agreed in Brussels last week to a referendum.
In an opinion piece in today's Irish Times, Mr Kenny writes that Ireland would not "unilaterally repudiate" its commitments to its European partners because the Irish strategy was growth, not default.
He says he feels “empathy and solidarity, not envy” towards Greece’s citizens over the draconian corrections its bailout package requires over the next decade.
The Greek crisis was of a different magnitude from Ireland’s he says. “They are being forced to sell €50 billion of state assets, cut monthly pensions above €1,000 by 20 per cent . . . and suspend 30,000 civil servants on partial pay. On top of this, they face another 10 years of austerity and Troika surveillance.
“While it is not surprising that a deal of this nature is being put to a referendum by the Greek government, who could possibly want this for Ireland?”
Yesterday Minister of State for European Affairs Lucinda Creighton portrayed the Greek government’s plan to hold a referendum as akin to hurling a “grenade” into the European situation.
She said the shock announcement by Greek prime minister George Papandreou raised huge questions over the euro zone deal. The manner in which it was announced was annoying, and the political situation in Greece seemed chaotic, leading to huge volatility in the financial markets yesterday.
She referred to the possibility that Mr Papandreou’s decision might revive concerns about contagion in the event of a Greek default. “Whether we like it or not, we are in a situation where a decision by a member state affects the 17 in the euro zone and the 27 in the EU.
“Everything has to happen in consultation. What happens in one country has an impact on another. Anyone who thinks otherwise is naive.” Ms Creighton said talks between euro zone finance ministers today would be crucial.“Everybody is now waiting on tenterhooks to see what is going to happen. But it’s very unclear. Members of the Greek cabinet were seemingly not aware that the prime minister was going to make the announcement.
“It undermines the semblance of stability that we achieved last week. Now we are back to square one effectively. It’s unfortunate.”
Her concerns were echoed by Fianna Fáil’s spokesman on finance, Michael McGrath, who viewed the Greek decision as having enormous ramifications for Europe and for Ireland’s prospects for recovery.
He said the Government’s new multi-year budgetary plan, scheduled to be published on Friday, could potentially be derailed by uncertainty caused by Greece.
“Nobody knows where this will end. If the referendum is defeated, it will pose a question for Greek membership of the euro and will potentially undermine the euro itself,” he said. “Ireland is relying on an export-led recovery. Clearly anything that dents economic and investor confidence in Europe will have a negative impact and could impact the drawing of our budget for next year.”
However, other Opposition TDs yesterday voiced support for the Greek stance and said the Government should do likewise. They called on Minister for Finance Michael Noonan not to repay the €715 million unsecured bond due to fall for repayment today by Anglo Irish Bank to a large number of banks and financiers.
Sinn Féin leader Gerry Adams said the party planned to hold a protest today.
Richard Boyd Barrett of People Before Profit said the Government should follow the Greek example and hold a referendum.