Merkel: Ireland will get a deal but no recapitalising banks

Ireland will get some kind of special deal to help ease the debt burden, German Chancellor Angela Merkel has told the Taoiseach — but she will not change her mind on recapitalising the banks.

The country was “a shining example” of how Europe will emerge stronger from the financial crisis than when it went in, but it must make market and social reforms that return it to competitiveness, the chancellor said.

Ms Merkel tried to dampen expectations of the country getting up to €32bn for the banks and cutting up to 18% of the debt, as sources indicated we can expect a series of small concessions over a period of time.