The first draft of the EU fiscal deal which could lead to a referendum will be available before Christmas, a senior Department of the Taoiseach official has confirmed.
The Oireachtas European affairs committee this morning heard from Geraldine Byrne-Nason, second secretary general at the Department, who reported on indications from Brussels on the status of the deal aimed at solving the debt crisis and saving the euro.
“So I expected that we will before the break for Christmas have to take home as bedside reading a draft international agreement,” Ms Byrne-Nason said.
She was responding to a question from Fianna Fail TD Timmy Dooley. Fine Gael Senator Fidelma Healy-Eames raised concerns about Britain’s stance.
“They have taken a stance at this stage that is in its nature an isolationist stance,” Ms Healy-Eames said.
Ms Byrne-Nason said the UK was often Ireland’s “staunchest ally” at the European table.
The sell-off in European stocks and the single currency paused for breath today as a good Spanish debt auction eased market nerves over the euro zone debt crisis and the bleak global economic outlook.
The downturn in the 17 economies that share the euro eased slightly in December, according to a closely watched survey.
The composite survey of thousands of firms by Markit showed a continued contraction - but at a slower rate than in November. Manufacturing in Germany - the eurozone's strongest economy - shrank for the third month in a row.
However, the figures were not as bad as many economists had expected.
Energy prices helped keep euro zone annual inflation at 3 per cent last month, data showed today, but prices for other goods were unchanged on the month, suggesting the European Central Bank could cut interest rates again.
Consumer price inflation was confirmed at the 3 per cent level for the third consecutive month, the European Union's Statistics Office Eurostat said, in line with expectations.
But stripping out energy, food, alcohol and tobacco, consumer prices fell 0.1 per cent in the month - another sign of the 17-nation euro zone's weakening economy. "Inflation has peaked," said Raphael Brun-Aguerre, an economist at JP Morgan.
"This number in November is probably the highest of this cycle. It should give the ECB more space to manoeuvre," he said.
The European Central Bank cut its main interest rate back to a record low of 1 per cent on December 8th to try to boost the economy as inflation pressures subside, and economists expect further cuts early next year.
Separately Bloxham Stockbrokers said today that Irish bond yields "ideally" need to fall to 5 per cent to 6 per cent if the country is to exit its EU-IMF rescue program in 2013, Bloxham Stockbrokers said in a report.
"That remains a tall order despite the huge improvement in market sentiment towards Ireland since mid-July," Bloxham said.
Irish bonds due in 2020 yielded 8.75 per cent today, up from 8.08 per cent a month earlier. It is "unlikely" Ireland will meet its 2012 program target of cutting its deficit to 8.6 percent of gross domestic product next year as the euro area may have slipped into recession, it added.
Meanwhile, Spain saw solid demand for its bonds today, paying more than 2 percentage points less to borrow over 5-years than Italy a day earlier as budget cuts helped ease concerns it could be among the next to fall in the euro zone's debt crisis.
But while the Treasury also paid much less to sell two 10-year bonds than a similar issue just a month ago, yields were still near euro-era highs amid doubts over leaders' ability to find a lasting solution to the region's debt crisis.
Additional reporting: Agencies
