Open

Coming up

Don't miss

Replay


LATEST SHOWS

WEB NEWS

Celebrities in the Israel-Gaza crossfire

Read more

IN THE PAPERS

Israeli strike takes out Gaza power station

Read more

IN THE PAPERS

French newspaper apologises for Sarkozy story

Read more

BUSINESS DAILY

Last-ditch talks aim to avert Argentina default

Read more

DEBATE

Europe's Plan for Putin: Will Russian Leader Bend After New Sanctions? (part 2)

Read more

DEBATE

Europe's Plan for Putin: Will Russian Leader Bend After New Sanctions?

Read more

FOCUS

Pakistan's Ahmadis living in fear of extremist attacks

Read more

WEB NEWS

Web users show solidarity with Iraqi Christians

Read more

THE INTERVIEW

Gilles Kepel, Islamic and Arab world specialist

Read more

  • Deadly shelling strikes Gaza UN school

    Read more

  • Video: Coping with rocket attacks in Israel’s Sderot

    Read more

  • Rats on the rampage at Louvre museum gardens

    Read more

  • Scores trapped as landslide hits Indian village

    Read more

  • Dozens killed in stampede at Guinea rap concert

    Read more

  • US and EU slap Russia with fresh sanctions over Ukraine

    Read more

  • 'Compelling' signs Kosovo leaders trafficked organs, prosecutor says

    Read more

  • Europe launches last resupply ship to space station

    Read more

  • Graphic: Ebola spreads across West Africa

    Read more

  • Video: How tourism is helping Rwanda’s gorillas, ex-poachers

    Read more

  • Islamists seize key Benghazi army base as fire rages on

    Read more

  • In pictures: ن - a sign of support for Iraq’s persecuted Christians

    Read more

  • Calls mount to ban France’s ‘violent’ Jewish Defence League

    Read more

  • Venezuela: Hugo Chavez’s ‘little bird’ strikes again

    Read more

Europe

Eurozone finance ministers to discuss Irish debt crisis

Video by Olivia SALAZAR WINSPEAR

Text by News Wires

Latest update : 2010-11-16

Eurozone finance ministers will discuss Ireland's debt crisis on Tuesday, a day after Dublin said it was in "official" talks with the EU but denied the negotiations involved a financial rescue package. Ireland says only its banks are struggling.

 

REUTERS - Euro zone finance ministers will try to find a way to end Ireland's debt crisis on Tuesday, with Dublin resisting pressure to seek a state bailout by signalling that only its banks may need help.
 
The Irish government, trying to protect a slim parliamentary majority, says it has been holding talks on how to provide stability for its banks and finances but denies a state rescue is needed to stop its problems spilling into other countries.
 
Luxembourg Prime Minister Jean Claude-Juncker, who chairs Tuesday's talks in Brussels, said Ireland was not even close to asking for a bailout but the Irish opposition said it believed such moves were already under way.
 
Bank of Spain Governor Miguel Angel Fernandez Ordonez urged Dublin on Monday to do more to calm financial markets, telling reporters: "It's not up to me to make a decision on Ireland, it's Ireland that should take the decision at the right moment."
 
Ireland's debt requirements are funded until mid-2011, but its borrowing costs have soared in the past week and investors are concerned it will not be able to service its debt. This has helped push up the borrowing costs of other countries on the 16-country euro zone's periphery, such as Spain and Portugal.
 
The Irish coalition government has been reluctant to apply for assistance, partly because it faces a by-election it can ill afford to lose on Nov. 25 and also because it says it wants to preserve its sovereignty.
 
It could ask for funding to support its banks, which were driven into debt by the global financial crisis and a property market crash. Such a move would be less risky politically than asking for a state bailout.
 
"The cost of money as expressed in the bond market has been very high although it eased today. We have to discuss these matters with partners ... how best to underpin financial and banking stability within the euro area," Prime Minister Brian Cowen told the national broadcaster RTE on Monday.
If such high borrowing costs became the norm, it would be hard for banks "to function as engines of recovery," he said.
 
‘No spill-over’
 
Economists say Cowen's government may be able to wait until after the by-election to request help but Irish opposition finance spokesman, Michael Noonan, told the BBC he believed "European intervention (is) under way."
 
Ewald Nowotny, a member of the European Central Bank's governing council, said the European Union wanted a "quick, good solution to Ireland, so that there will be no spill-over" to other heavily indebted countries such as Portugal and Spain.
 
Portuguese Finance Minister Fernando Teixeira dos Santos told Reuters there were no plans for Lisbon to request emergency foreign funding.
 
At their monthly meeting, the euro zone finance ministers are likely to praise Ireland's 2011 budget cuts, which face a parliamentary vote of approval next month. They are joined for talks on Wednesday by the other EU finance ministers.
 
They are also expected to discuss the future euro zone crisis resolution mechanism, which Germany wants to start from 2013, replacing the 440-billion-euro European Financial Stability Facility set up after Greece sought help in May.
 
EU sources say possible aid under discussion ranges from 45 billion to 90 billion euros ($63 billion-$123 billion), depending on whether Ireland needs support for its banks.
 
Ireland says Germany has aggravated problems by pushing the idea of asset value reductions or "haircuts" for private bondholders under the planned permanent rescue mechanism.
 
The idea has unsettled bond markets, which saw the debate as laying the ground for a potential default by euro zone countries such as Ireland, Portugal or Greece.

 

Date created : 2010-11-16

  • FINANCE

    EU seeks to reassure markets over Irish financial woes

    Read more

  • IRELAND

    Weak manufacturing, sales data further damage Irish recovery

    Read more

  • IRELAND

    Moody's cuts Ireland's debt rating by one notch

    Read more

COMMENT(S)