Kenny: Treaty change will not aid markets

ENDA KENNY has told German Chancellor Angela Merkel that changing the EU treaty will not solve the problem of markets abandoning the euro, and that the time had come to turn to the ECB.

He also expressed hope that Ireland will return to the bond markets by the end of 2012.

He spoke at a sometimes tetchy press conference after their hour-long meeting. “You need to deal with this crisis with the tools we have now,” he told her, warning contagion was a real issue for a small country such as Ireland.

The chancellor, who welcomed the Taoiseach with full military honours on his first official visit to Germany, described Ireland’s progress as “remarkable” and said she was well aware of the effects of “this very harsh and hard programme” on the people of Ireland.

However, Ms Merkel was adamant that opening up the almost unlimited firepower of the ECB to rescue the euro was not the way to go, arguing that existing treaties would not allow it. Instead, the markets would respond to Europe standing united and to plans to change the EU treaty so countries breaching debt and deficit rules could be punished, she said.

Mr Kenny said Ireland intended to regain and maintain its economic sovereignty once it had fulfilled the terms of the bailout, adding that the country would not surrender power over issues such as taxation. Ireland must be free to express its own personality, he said.