Brussels, 03/04/2009 (Agence Europe) - Meeting in Prague on Friday 3 April 2009, Eurogroup surveyed the economic situation in the eurozone countries, expressing concern about Ireland, which may have an adverse impact on the rest of the eurozone. The ministers are confident that Dublin will improve the situation in the medium-term. After the meeting, Eurogroup chairperson Jean-Claude Juncker said the Irish government was aware of the very serious situation in the country. Juncker explained that Irish finance minister Brian Lenihan had told his colleagues that the Irish government was going to take extra measures to meet its commitments to stabilise the national public deficit, currently standing at -9.5%. EU Economic and Monetary Affairs Commissioner Joaquin Almunia said the politicians fully backed Ireland's pledge and were certain that in order to restore confidence, attract investment and create the conditions for a sustainable upturn in the Irish economy, one of the necessary conditions, but not the sole condition, was to start by consolidating the budget to restore medium to long-term stability to Ireland's public finances. He explained that Ireland's public debt had expanded very rapidly, not just as a result of the budget deficit but also because of the bailout of Irish banks. Jean-Claude Trichet, the president of the European Central Bank (ECB), said that the ECB was refinancing Ireland's high-street banks to an unlimited extent at a fixed rate through the National Bank of Ireland. The National Bank of Ireland announced on Friday that the country's gross domestic product would shrink by 7% in 2009 and 3% in 2010, describing this as unprecedented. The Bank of Ireland says that exceptionally tough global economic and financial conditions are worsening the outlook for the Irish economy.
Quizzed about the outcome of the G20 Summit in London on 2 April 2009 (see EUROPE 9875), the finance ministers expressed satisfaction. Germany's finance minister, Peer Steinbruck, said: “When you compare the situation of yesterday with the beginning of 2007 before the turmoil started, I think we made great progress (at the G20, Ed,). I am very satisfied that particularly the United States have been very helpful in implementing and improving further regulations.' Christine Lagarde, France's finance minister, said the markets had reacted positively to the G20 summit. Aware that not all the problems had been solved, Lagarde said the decisions taken at the G20 were a good basis for rebuilding a more stable system.
According to the press release issued by the G20 leaders, 'The era of banking secrecy is over.' On Thursday, the Organisation for European Cooperation and Development (OECD) published three 'name and shame' lists - a list of countries which have generally implemented international rules on administrative cooperation in the sharing of information; a list of 38 countries and territories that have pledged to implement reforms but have not yet done so (including Austira, Beligum and Luxembourg); and a blacklist of non-cooperative sites (including Costa Rica, Malaysia, the Philippines and Uruguay). Austria's finance minister, Josef Pröll, said his country being included on the second list was proof that Austria had taken a step in the right direction. Juncker said he had read the lists and, like his Austrian and Belgian colleagues, had noticed that Luxembourg is also on the second list. Juncker, who is also Luxembourg's prime minister, said the 'factual list' was of countries that had accepted the OECD agreement on the exchange of banking information upon request but had not yet been able to apply it because it would necessarily involve the signing of further agreements to avoid double taxation. Explaining that Luxembourg was currently negotiating with France and Germany over adding special clauses to existing bilateral agreements, Juncker pointed out that it was not possible to sign some two dozen deals only three weeks after accepting the OECD rules. Juncker said when he arrived in London that the way some G20 countries were being treated was mystifying. He said some parts of the United States, like Delaware, Wyoming and Nevada, should also be included on the OECD blacklists. China managed to ensure Macao and Hong Kong were not included on any of the lists. (M.B. trans fl)