Cowen dismisses speculation on eurozone break-up

FINANCE Minister Brian Cowen insisted yesterday that there is no question of any eurozone country abandoning the single currency.

The euro has been experiencing some jitters on international markets following the rejection of the Constitution by France and the Netherlands last week.

Speculation about the future of the currency was fuelled by comments by two ministers in the Italian government blaming the euro for the country’s recession and suggesting the lira should be brought back.

At a meeting in Luxembourg yesterday, the EU’s finance ministers spent a very short time discussing the situation, possibly for fear of fuelling speculation about the currency.

Luxembourg Prime Minister Jean-Claude Juncker, who chaired the meeting, said talk of a break-up of the euro was “absurd.”

He called on EU leaders at their summit in Brussels next week to do a deal on the union’s five-year budget, “to show that Europe was working.”

Mr Cowen said walking away from the currency was a non-issue for Ireland and he described monetary union as being “indestructible” for those in the euro-zone.

He attributed much of Ireland’s economic success - low inflation and unemployment, high growth and exports - to the adoption of the euro.

On the EU’s budget negotiations, Mr Cowen admitted Ireland is concerned about the implications for regional development and cohesion funds of the current proposals.

A number of countries including Germany want to cap the budget at 1% of EU GDP which would leave less for Ireland than the €1 billion expected.

“The present proposals do not meet our requirements”, said Mr Cowen.

However he would not say Ireland would veto an agreement on this basis.

Much of the meeting was spent discussing a proposed travel tax to raise money for developing countries and set off a major row between ministers.

Ireland is completely against the idea as it would add to the costs of air transport and militate against tourism as well as involving the EU in tax matters.

The Taxation Commissioner, Laszlo Kovacs, was asked to put together a proposal but there was general agreement that any such tax would be voluntary.