Ireland’s bid to ease the debt burden got public support from the head of the eurogroup just days before the Government expects a decision on its bid to postpone the €3.1bn Anglo payment.
At a public hearing in the European Parliament, Jean-Claude Juncker said: “There are good reasons to ease the burden which has been put on Ireland, as far as the debt service.”
He said he was not in a position to make a “public announcement” on the matter, but Labour MEP Nessa Childers, who attended the hearing, warned that Ireland’s debt was not sustainable. “The Irish firewall will not hold,” she said.
Mr Juncker will be one of the finance ministers attending the meeting in Copenhagen this Friday when Finance Minister Michael Noonan hopes to get the go-ahead to swap the repayment for a bond, pushing the debt out to 2025 at least.
He said there was no real alternative to consolidating the public finances, but on its own it cannot be the only response to the recession in Europe.
“We have to organise a virtuous circle between public finances and growth in Europe, and target countries that are currently weakened,” he said. “I would like to see a growth policy underlined by adequate financial policies.”
Ms Childers welcomed Mr Juncker’s reference to easing the debt burden. “This is a positive response from the eurogroup but we need real, firm action if progress is to be made in assisting Ireland’s return to economic growth and job creation,” she said.
Speaking as “a social democrat for the Irish people rather than as a member of the Government party that was constrained by the bailout programme”, she said Irish debt was unsustainable in its present form and needed to be eased by our European partners.
“Europe cannot take our forbearance for granted and we could say the unemployed are the casualties of this firewall to protect Europe,” said Ms Childers. She warned the firewall would not hold.
An austerity-led approach to Ireland and Europe’s economic difficulties is not working and more growth has to be encouraged, she added.
She invited her colleagues to agree with the frontrunner for the French presidency, Francois Holland, that “extending the mandate of the ECB is now required to play a greater role in boosting economic growth”.
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