skip to main content

Kenny 'reassured' on Greek fall-out

Enda Kenny - 'Good meeting' with Sarkozy
Enda Kenny - 'Good meeting' with Sarkozy

Taoiseach Enda Kenny says he has been reassured that countries like Ireland will be protected from any fall-out from a potential Greek default.

He was speaking to RTÉ at the end of a two-day EU summit in Brussels, which was dominated by the Greek debt crisis.

Mr Kenny said he wanted to ensure that countries which were measuring up, like Ireland, were completely protected from any fall-out. The Taoiseach said he made this remark both at the EU Council and also to individual leaders.

Asked if we was reassured that this would be the case, Mr Kenny said: 'I am reassured of that.'

He also said Ireland was regaining the trust of other EU states and that its reputation was being rebuilt. Mr Kenny said there was a clear view that Ireland could be held up as an example that the EU/IMF loan facilities can work, as long as the government and people worked together.

The Taoiseach said Irish and French officials would continue to try to find a resolution to the row over Ireland's bail-out interest rate. 'I had a very good conversation with President Sarkozy and we agreed that officials on both sides should continue discussions. And we're very happy with that agreement,' he said, adding that he would not set a date for the conclusion of any deal.

Meanwhile, German Chancellor Angela Merkel told journalists that Greece would now receive its second bail-out. But she said private creditors, as well as European taxpayers, would be involved and strict conditions would apply.

Dr Merkel also urged both Ireland and Portugal to continuing implementing their austerity plans.

British Prime Minister David Cameron suggested that, on this occasion, Britain would not be making a contribution to help Greece.

The Greek parliament has announced that MPs will debate and vote on the five-year budget plan next Tuesday and Wednesday, along with an implementation law spelling out the measures in more detail. A vote against the plan would trigger an immediate crisis and probable default.

The Taoiseach said leaders were told by Greek Prime Minister George Papandreou that his government was absolutely committed to dealing with its challenges. Mr Kenny also said the conditions that would apply to a second Greek bail-out would be very strict, but the Greek government was going to have to deal with that.

In other decisions, EU leaders formally approved Mario Draghi as the new head of the ECB to take over from Jean-Claude Trichet in November, and Croatia received conditional approval to join the EU.

New Greek bail-out 'similar' to last year in size

Greek Prime Minister George Papandreou said today that a second bail-out for Greece, being prepared by European partners and the IMF, will be 'similar' in size to last year's €110-billion rescue.

'We are talking about a huge, huge amount,' said Papandreou, after formally asking for aid last night at a two-day European Union summit in Brussels.

While he said it was 'too early to give a precise amount,' he said the final sum would be 'similar to the first loan package' in May 2010, which was not enough to prevent the government in Athens from slipping ever deeper into the red.

Deep austerity cuts brought about a worse-than-expected recession over the past year, and another €28 billion of savings on Greece's public budget over the coming five years are required to be signed off by lawmakers next week before any money can change hands.

Likewise a vast sell-off for state holdings, which EU leaders hope can raise up to €50 billion, the success of which the Greek premier says will be a factor in the final sums.

The actual size, Papandreou admitted, 'depends on the participation of the private creditors,' those banks, pension funds and insurers that the EU wants to contribute by way of an 'informal and voluntary' rollover.