Ross urges Kenny over debt default

Taoiseach Enda Kenny has been urged to consider reneging on the country’s debt as he prepares for this week’s emergency EU summit on the eurozone crisis.

A week after Ireland’s credit rating was downgraded to junk, Independent TD Shane Ross said the international money markets believed Ireland will not be able to pay what it owes.

Mr Ross accused the Government of spin in claiming it was meeting its targets under the bailout deal, and said Mr Kenny was faced with two choices – denial or default.

“What I suggest to you and what I ask you is this, would you not consider taking up the default gauntlet, and in a structured way if necessary saying yes, default is not a negative, default is a positive, because believe me, the markets believe it is inevitable,” Mr Ross said.

The Independent TD claimed the summit in Brussels was the most important of Mr Kenny’s career as fears mount that debt contagion could spread from Greece to Italy and Spain.

Mr Kenny dampened hopes of a solution to the crisis at the meeting, claiming no over- all decision would be reached.

But he admitted to not speaking to any EU leaders concerning the crisis in the last 10 days.

“What I’d like to think might happen is that the eurozone leaders will make a series of decisions here that will start to restore confidence in the markets in a number of countries,” Mr Kenny told the Dail.

“Obviously, as the German chancellor has pointed out, there will not be an overall decision that will sort this out once and for all on Thursday, that it is a series of gradual steps and measures to be implemented.”

The summit will attempt to agree a second bail-out of Greece in the hope of calming financial markets and stop contagion spreading.

Austria’s central bank governor Ewald Nowotny speculated that a Greek rescue deal could involve the country defaulting on some of its debt – a move the European Central Bank has ruled out.

Mr Ross said the Taoiseach’s comments suggested another fudge that would not be welcomed by the markets.

A Government spokesman said the focus of the summit will be on the Greek crisis, and the possible implications for Italy and Spain.

But he said the Government remains committed to a deal on lowering the interest rate on Ireland’s international loans.

Mr Kenny refused a request from Mr Ross to bring the Dail back from its summer recess next week to discuss the summit.