Brussels, 15/11/2010 (Agence Europe) - On Monday 15 November, the European Commission actively denied rumours of any discussions with the Irish government about an EU aid package. A spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn said that as Ireland has said there has been no request for financial aid. The British press reports of rumours intensified over the weekend of talks between the EU authorities and the Irish government on aid of up to €90 billion. Rehn's spokesperson pointed out that Ireland's borrowing requirements were covered until the summer of next year, but expressed concern about the stability of the eurozone as a whole because of the turbulence on the money markets.
Suffering under the burden of bailing out the banking industry to the tune of more than €50 billion, Ireland's public deficit is expected to reach 32% in 2010. On Monday, the vice-president of the European Central Bank (ECB), Vitor Constancio, said that the European Financial Stability Facility (EFSF) could be activated to deal with the banking industry's losses by providing aid to the Irish government. He said that the Irish bank problems were not only a problem of cash flow, but also of capital to absorb the losses and the EFSF would be adequate for that purpose.
The costs of rolling over Ireland's sovereign debt reached a similar level at the end of last week as those of Greece at the height of the crisis. At the end of the month, Ireland will unveil a four-year austerity programme with a view to returning to the Stability Pact rules in 2014. The cuts to be made in 2011 will rise from €3 billion to €6 billion. Rehn's spokesperson said that Ireland had always achieved good budget consolidation outcomes, adding that the measures would need to be credible and applied to the letter. (M.B./transl.fl)