Brussels, 23/11/2010 (Agence Europe) - The European Commission believes that it is crucial that Ireland approves its budget for 2011 as soon as possible. The draft budget is due to be submitted to the Irish parliament on Tuesday 7 December, along with spending cuts of €6 billion. On Tuesday 23 November, a spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn said that the Commission welcomed the strong pledge by the Irish government to get the budget for 2011 approved by the parliament, to unveil a four-year economic programme on Wednesday and conclude the current talks on a three-year aid programme from the EU and the IMF. On Monday evening, speaking to the MEPs on the EP's economic and monetary affairs committee, Olli Rehn said: 'We don't have a position on the domestic democratic politics of Ireland, but it is essential that the budget is adopted in time and we are able to conclude the negotiations on the EU-IMF programme on time.' On Tuesday, Rehn met a dozen Irish MEPs to discuss the situation.
Ireland's official request for aid has plunged the country into political turmoil. Faced with the danger of implosion of the government and riots on the streets of Dublin, the holding of early general elections has been announced (in January, after the 2011 budget is passed). The Irish prime minister (Taoiseach) Brian Cowen said that voters' interests would not be served by delays in the necessary stages of guaranteeing financial stability and the Irish economy, and at worst, delays could endanger stability.
Criticism of Charlie McCreevy. On the fringes of the EP's plenary on Tuesday, several MEPs commented on the situation in Ireland. The chair of the Socialist Group, Germany's Martin Schulz, said that the markets reacted positively to every sign of unity in Europe. German Green Daniel Cohn-Bendit said that the former EU internal market commissioner, Charlie McCreevy of Ireland, had wanted to make financial securities a pillar of the internal market and Ireland had annoyed Cohn-Bendit by McCreevy's championing of deregulation and as little taxation as possible. Today, however, Ireland is unable to act and we are seeing the collapse of neo-liberalism and deregulation, added Cohn-Bendit.
Will the instability spread? Ireland's budget problems have raised fears of other eurozone countries being affected, counties like Portugal and Spain. The chair of the Eurogroup, Jean-Claude Juncker, said: 'I don't think any immediate contagion effect could be the case.' A spokesman for Olli Rehn explained that 'yesterday's decision on Ireland is also meant to stop any possible tensions or possible contagion effects on other economies of the euro area and the EU.' Unlike Ireland, Portugal has a “relatively healthy” banking industry and a 2011 budget that would allow it to meet its public finance consolidation objectives, added the spokesperson, rejecting any notion of similarity between the two countries. (E.H./M.B./transl.fl)