Greece must follow Irish example to avert financial crisis, says Cowen

Greece must follow the Irish example to find a way out of their financial crisis, Irish Prime Minister Brian Cowen told a European Union summit in Brussels Thursday.

It is an extraordinary turnaround where Ireland, until lately seen as the basket case of Europe, has suddenly become the example to countries that now have even greater problems.

Greece will owe $90 billion dollars in repayments by the end of 2010, the EU summit heard. The International Monetary Fund (IMF) and the European Union are closely monitoring developments there.

Greece's deficit is 13 per cent of GDP, 10 per cent over the agreed limit. Ireland's was close to 15 per cent, but has been reduced by 2.5 per cent since the Irish took draconian measures to curb public spending.

There are more hairshirt budgets on the way in Ireland and the Irish also have far less borrowing.

Greece, on the other hand, is threatened with a national strike that is likely to go ahead if they enact such draconian measures.

Brian Cowen, however, warned yesterday that Greece has no choice but to reduce their deficit by 4 per cent this year.

"It is the same process. It is an excessive deficit procedure. The same as we had to take," Cowen said.

The key step for Greece was "to provide confidence," he said that the country was tackling its problems.

The Irish had done that by its harsh measures. "All of that is about strengthening the view of Ireland, both out there and back home, that we are determined to gain control of our own affairs. That's what we want to do," Cowen added.