IRISH RESPONSE:PROPOSALS TO introduce eurobonds or guarantee schemes to bolster confidence in debt-addled euro zone countries, including Ireland, have received a conditional welcome from Opposition parties and groupings.
Fianna Fáil and Sinn Féin separately said they saw merit in some of the solutions being advanced to deal with the euro zone crisis.
However, Sinn Féin said that, while it was open to the concept of eurobonds, it would not agree to any proposal that would impose further conditions or dilute the State’s sovereignty.
That view has also been articulated by Donegal South West TD Thomas Pringle, one of the group of Independent deputies who speak regularly on economic affairs.
Fianna Fáil spokesman Michael McGrath said he thought it unlikely that eurobonds would remain on the table in present discussions among EU leaders. He also said there was little prospect that other euro zone countries would agree to the policy line developed by Minister for Finance Michael Noonan, that of a system of guarantees that would allow Ireland to re-enter financial markets in 2013 at reasonable interest rates.
Mr McGrath said it was unlikely any further agreement for Ireland after 2013 would come without further conditions.
“If we cannot stand on our own two feet and convince the markets that we can engineer economic growth we will have to find an alternative.
“I actually think it’s within our national interest to work within fiscal rules. We will see that exercise and control will be increasingly shared by the union and individual countries. It is not such a bad thing as long as it does not work its way down to the micro level, for example not interfering with the drafting of government budgets.”
Mr McGrath said the argument was a little academic for Ireland as the State was insulated from the turbulence of the markets in the short term and does not require funding until 2013.
“When we do return to the markets we need the cost of borrowing to come down very significantly.
“Eurobonds look unlikely at this point. Mr Noonan’s proposal of the European Financial Stability Fund guaranteeing borrowing would seem to be a more attractive option. But we are not certain that our counterparts will go with it,” said Mr McGrath.
