Minister for Transport Leo Varadkar has said that if Spain gets a better funding deal for its banks, then the Government would expect to have those terms applied retrospectively here.

He told RTÉ's The Week in Politics that the principle in Europe has always been that better terms are given to countries that signed up first.

Mr Varadkar's comments followed ones by the President of the European Parliament earlier today, where he said the mutualisation of sovereign debt through euro bonds is needed.

German MEP Martin Schulz said that a situation where the ECB gets money for 0% and then lends it on at 7% to countries in difficulty is not sustainable.

He described the policy as "unhealthy" and said such an "abuse" of the financial markets needs to be brought to an end.

Speaking on RTÉ’s This Week, Mr Schulz said the introduction of euro bonds would do a lot to "water down" tensions in Europe and said sovereign debt can be managed through such an act of solidarity.

He said Europe should be grateful to the Irish people for their decision, adding that Irish people had suffered a lot under strict budgets for some time and the fact people voted for strict rules for a longer period is testament to their commitment and discipline.

Mr Schulz said he predicted Ireland would be amongst the first countries to attract significant external investment as a result of its decision on the fiscal treaty referendum.

He said Europe needs to do more for Ireland and other struggling countries in Europe.

Mr Schulz strongly criticised the European Council and the ongoing meetings of heads of government in Europe, who he said were slowing the reform process.

He said meeting after meeting was failing to turn out agreement. He also criticised the Dutch, who he said were difficult to deal with.