Sighs of relief from Brussels

THERE were sighs of relief in Brussels at the news that Ireland succeeded in selling €1.5 billion of bonds as it reduced the likelihood the country would call on the EU-IMF rescue fund and stressing the euro.

Even though the country was forced to pay a record high interest rate, many considered that overall given the circumstances, the outcome was positive.

European Commission President Jose Manuel Barroso said the EU was following the situation in Ireland closely.

“We believe they have the capacity, also with EU support, to face any kind of more difficult situation.”

His information suggested the situation was under control and he praised the Government for taking what he described as very courageous measures from the start.

He added the country was taking the right measures to reduce the budget deficit.

The auction came just a day after EU officials criticised Central Bank Governor Patrick Honohan.

They said his comments on the country’s ability to reduce its deficit were not helpful.

Mr Honohan said the budgets for the coming years would have to be “reprogrammed”. He was referring to the budget deficit, expected to jump from 14.3% last year to 24% this year, reflecting the cost of resolving Anglo Irish Bank.

“We need to keep up investor confidence,” said one official who said bankers should not comment on Government strategy.