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Enda Kenny: Tomorrow's EU summit probably won't strike a big deal

Enda Kenny says tomorrow’s EU summit probably won’t reach a deal – but France is promising a “strong message”.
Jul 20th 2011, 12:39 PM 341 5

TAOISEACH ENDA KENNY has told the Dáil that he does not expect tomorrow’s emergency summit of EU leaders to come up with a substantive deal on how best to tackle the Eurozone’s crippling debt crisis.

During Leaders’ Questions in the Dáil this morning, Kenny said the options being considered at the highest levels at tomorrow’s summit were all options that Ireland had “put on the table”.

“That is, the entire questions of the [European Financial Stability] Fund, its flexibility, maturity dates, interest rates, and a number of other options.

“As we meet here this morning, the agenda of tomorrow’s meeting of the Eurozone leaders is under very active consideration. Officials from this country here went to Brussels yesterday evening.”

Kenny also took aim at Fianna Fáil leader Micheál Martin, who criticised for the slow progress in getting a reduction in the Irish interest rate.

“The council of European leaders decided that there should be an reduction in the interest rate, in principle… we did not ask to be in this loan repayment situation, that’s what you landed us in,” Kenny said.

‘Strong message’

While Germany’s Angela Merkel has admitted that tomorrow’s summit won’t come up with a major agreement, this morning French ministers expressed their demand for some form of decisive action.

Reuters tells how the country’s new finance minister Francois Baroin said leaders would have to focus on easing the burdens on Greece – including lowering its interest rate and giving it longer to repay it loans.

His cabinet colleague, foreign minister Alain Juppe, also said he was “sure we will find an accord”.

Among the other options now set for discussion tomorrow, Bloomberg says, is the possibility that the continent’s €440bn bailout fund could also be deployed to recapitalise the continent’s banks and not just its governments.

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The European Financial Stability Fund is the facility from which Ireland is borrowing €22.5bn of its current EU-IMF loan package.

It is thought that the European banking sector may be offered a precautionary recapitalisation of as much as €80bn in order to weather a future financial storm.

Last week’s stress tests outlined capital shortfalls of around €2.5bn in eight banks, but those stress tests have already been questioned over their failure to account for the possibility of a Greek debt default.

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Gavan Reilly


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