IRISH REACTION:TAOISEACH ENDA Kenny last night said he was increasingly optimistic that European leaders can broker a comprehensive deal to remedy the euro zone crisis.
As he left the European Council building last night, after 12 hours of discussions, Mr Kenny said progress had been made. EU leaders will return to Brussels on Wednesday to finalise its plan.
“I’m more hopeful than when I came out this morning that by Wednesday we will be able to have moved this process along to a point where decisions can actually be made.” He said that a number of issues, which were complex in nature, remained to be resolved.
“I don’t want to go into the technicalities of those except to say that between now and then there will be intensive discussions and negotiations both in respect of the Greece situation, the leveraging of the European Financial Stability Facility (the European rescue fund) and the question of ‘firewalls’.” These are measures which will be built into the plan to protect other countries, including Ireland, from being affected by the possible contagion effect resulting from a write-down in Greek debt.
He said a number of his colleagues at the meeting had expressed concern about this issue.
He also said that it had implications for Ireland.
Mr Kenny said he had been encouraged by the level of engagement at yesterday’s meeting.
“For the first time actually I found the leadership of the euro zone focusing in on the fundamentals in respect of Greece and the fear of contagion.” That also applied, he said, to the discussions on the best way of leveraging the rescue fund to include a ‘firewall’ to protect other countries from the knock-on effect of a Greek write-down.
“There was some really relevant proposals put forward there. Whether or not they’ll all be agreed by Wednesday remains to be seen,” he said.
He added there was “clarity and certainty about the fact that everybody wants this sorted out”.
“There was clearly an understanding that the world is watching Europe and clearly an understanding that there isn’t any point in doing this in a half-hearted fashion.” He emphasised that any solution for Greece would have to be “absolutely watertight” to avoid any carryover to other countries.
“[That] could have devastating impacts. People are very well aware of that and expressed so trenchantly,” he added.
Earlier, French president Nicholas Sarkozy singled out Ireland for special praise yesterday when outlining how the European Union has responded to the euro zone and debt crisis over the past two years.
Mr Sarkozy said yesterday that Ireland was on the edge of the abyss in 2008 but had made a strong recovery. “Ireland is a country today that is almost out of troubled waters and out of crisis and that is a fact that cannot be challenged,” he said.
The French president was speaking at a joint press conference with German chancellor Angela Merkel and was responding to a question that euro zone leaders had failed to resolve the crisis over the past two years.
The Minister of State for European Affairs Lucinda Creighton said last night that the Government was very pleased with Mr Sarkozy’s comments.
“We are very pleased that the hard work and effort we have put into the programme is paying off and is recognised. It is a very important milestone.” The Fianna Fáil spokesman on finance Michael McGrath contended over the weekend that write-downs on debt could not be confined to just one country and raised the matter of equity.
“The Taoiseach cannot avoid asking if Greece is to receive a 60 per cent write down on its sovereign debt, what is Europe’s justification for forcing Ireland to pay €3.5 billion of unguaranteed bondholders in Anglo Irish Bank and Irish Nationwide?” he said.
“With €700 million of this due to be repaid in 10 days time, the Taoiseach must press this matter urgently,” he added.
Richard Boyd-Barrett, the People Before Profit TD, claimed that the euro zone leaders were in disarray.
“The paralysis we are witnessing among European heads of state is indicative of the dead-end situation that Euro zone leaders have arrived at.
“It is obvious that the policy of bailing out banks and inflicting brutal austerity is failing spectacularly,” he said.