One of Europe’s most influential leaders has offered Ireland the promise of a new deal on the bank bail-out.
As Spain comes to terms with the austerity measures that will follow its $130billion bail-out, EU commissioner Olli Rehn has addressed the Irish issue.
Speaking at a European parliament meeting in Strasbourg, Rehn confirmed his desire to help Ireland achieve a deal on restructuring its banking debts.
He told the parliament that he remained ‘hopeful’ that Ireland could be permitted to rearrange its Anglo Irish Bank promissory notes.
He also promised a new deal on other banking liabilities in order to lower the burden on the Irish taxpayer.
Rehn made his remarks about Ireland while confirming that Spain’s banking bailout will not come with terms and conditions for the government itself.
He also suggested Spain could be given more time to reach its deficit targets.
“There will be no new conditions on fiscal policy and structural reforms, because this is dealt with under the re-enforced economic governance and there the normal policy conditionality applies,” said Rehn said.
“The Spanish bailout is intended to be seen as a very clear signal Euro area is willing and able to tackle the remaining challenges and in this context Europe is standing by Spain and supporting Spain in its challenges in order to restructure the banking sector.
“If the governments of Spain’s autonomous regions were able to cut back on their spending, and Madrid could present a convincing two-year budget plan, its deficit-to-debt targets could be put back a year from 2013 to 2014.”
Website TheJournal.ie also reports that Rehn outlined further plans for fiscal union, saying the most stable long-term solution to the Eurozone’s debt crisis would be ‘stronger responsibility through a pooling of sovereignty at the European level, while at the same time also pooling our burden-sharing’.
He added however that deficit countries need to achieve surpluses to in order to bring the external debt in a declining trajectory.
“This requires further improvements in competitiveness and it need to go hand-in-hand with the private sector deleveraging and the consolidation of public finances,” he said.