LEO VARADKAR, MINISTER for Transport, Tourism and Sport, has said that the landmark EU deal agreed on Friday is unlikely to be enough to end the crisis in the eurozone.
He also said that the eurozone is already effectively a federal state – but without a central bank that can intervene to fix the ongoing problems.
Speaking on the Marian Finucane Show on RTE Radio 1 this morning, the Minister acknowledged that “a lot of people have concerns about Britain not being in the new fiscal compact”.
The Fine Gael TD said that he believed that fiscal coordination is “a good idea” but that the deal “won’t be enough to solve the problem that we have,” adding:
We are effectively a federation now that we have the same currency, but we don’t have a central bank that acts like a federal reserve.
His comments were echoed by economist David McWilliams on the same programme who said that he believed that the deal would be ultimately “unsuccessful” but was a step in the direction of a German-dominated EU backed up by France.
The Minister also indicated that a financial transactions tax is unlikely to be introduced throughout Europe.
There was a mixed reaction across Europe to Friday’s crucial EU deal which was a coordinated attempt by eurozone member states to deal with the ongoing crisis.
Separately, speaking about the government u-turn over the controversial Budget plan to cut disability allowances, Minister Varadkar distanced Fine Gael from the proposal and said that the suggestion had come from Labour ministers.
“No proposal for social welfare cuts came from any Fine Gael minister,” said Varadkar, adding that all the suggestions for cuts came from either the Department of Public Expenditure and Reform under Brendan Howlin or the Department for Social Protection under Joan Burton.
“The impression being created is that Fine Gael came up with this great idea for welfare cuts and that is not the case,” said the Minister, adding that the decisions had been made “collectively”.