Taoiseach wants bank debt to be shared at EU level

Thursday 28 June 2012 12.09
Enda Kenny was at launch of Business for Ireland's Yes campaign launch
Enda Kenny was at launch of Business for Ireland's Yes campaign launch

Taoiseach Enda Kenny has said he is concerned that Ireland is being held back by the banking crisis, despite complying with the provisions of the EU/IMF bailout package.

In an interview in The Irish Times this morning, Mr Kenny said he believed that the burden of Ireland's banking debt needed to be shared at European level.

He said the country's debt problems would not be solved at tomorrow's summit, but he hoped for an agreement on a banking union that would pave the way to a resolution of the eurozone banking crisis.

EU leaders are to hold a two-day meeting in Brussels from tomorrow to discuss proposed reforms for the region's banking sector and region-wide rules on fiscal discipline.

The talks come as pressure increases on Europe to put its finances in order amid concern that its debt crisis will lead to another global downturn.

Meanwhile, German Chancellor Angela Merkel has repeated her opposition to eurobonds or the mutualisation of bank debt ahead of the summit.

Speaking in the Bundestag, Dr Merkel said joint liability can only happen when sufficient controls are in place.

She said: "Guarantees and controls must go hand-in-hand. There can only be joint liabilities when sufficient controls have been put in place."

Dr Merkel has also dismissed calls from Spain and Italy today for emergency action to lower their soaring borrowing costs.

Elsewhere, the head of the Irish Congress of Trade Unions, David Begg, has said EU leaders must admit that four years of austerity policies have not worked and a change of direction is needed now.

He said the current economic and fiscal plans had failed to secure the confidence of the markets but instead had polarised EU citizens to a greater and greater degree.

Mr Begg was part of a delegation from the European Trade Union Confederation that met EU Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy.

Speaking to journalists afterwards, Mr Begg said EU leaders needed to tackle vital issues quickly, such as introducing eurobonds and making the European Central Bank the lender of last resort.

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