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Kenny tells Dáil: ‘I have an answer to the euro problem’

The Taoiseach says the only way to solve Europe’s debt crisis is to tap the European Central Bank’s “infinite capability”.

TAOISEACH ENDA KENNY has assured the Dáil he will play a major part in next week’s discussions on trying to end the European debt crisis – confidently telling TDs: “I have an answer to the problem.”

Speaking during a fraught session of Leaders’ Questions, Enda Kenny said measures to improve the size and power of the existing European bailout fund, the EFSF, had failed – and that it was now time to tap the power of the single currency’s central bank.

“I’ve set out, on many occasions, that the European Central Bank is the port of call, of infinite capability, to prevent contagion,” the Taoiseach said.

The answer to this problem now lies with the support of the ECB, in whatever form.

The summit of European heads of government, planned for next week, is set to hear proposals from European Council president Herman van Rompuy on solving the debt crisis.

The last such meeting resolved to increase the capacity of the European Financial Stability Fund, in order to provide an effective “firestop”, but Kenny said this had lost the confidence of the markets – with borrowing costs for European countries continuing to rise.

“We’ve had all the speculation, and endless comment, endless commentary, from economists, from bankers… who do not have to make the decision here,” Kenny said.

The Taoiseach argued that giving the ECB a greater role in the crisis would help to resolve fears about the solvency of European countries, as the ECB has the power to produce more currency and ensure all obligations are met.

Green Jersey

His comments came after Fianna Fáil leader Micheál Martin criticised him for failing to involve the Dáil in proposals for changing European treaties, as is being mooted on the continent.

“There’s more clarity in international media than there is in this house,” Martin complained. “There is no frankness of discussion, and no engagement.”

Kenny later said he was impressed with how Herman van Rompuy was approaching his task to solve the crisis, but said proposals to change the European Union’s founding treaties could not be “achieved overnight”:

The Treaties set out a process, involving all the relevant institutions and national parliaments, that ensures that all proposals for change are given the level of detailed scrutiny they deserve.

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Ireland’s first priority, he said, would be to use whatever means the existing treaties would allow.

Kenny was criticised by Shane Ross, who said Kenny’s speech ahead of next week’s European Council meeting sounded “like it was written by a Eurocrat… like a government that’s going to raise a white flag.”

Ross said he feared that Kenny was “not going to wear the Green Jersey when he gets to Europe on December 9th.”

Eurozone finance ministers look to IMF for help as bailout fund falls short >

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Gavan Reilly

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