The European Commission’s internal market commissioner said today that he was confident Ireland would overcome its current economic difficulties.
"I am confident there is light at the end of the tunnel," Internal Markets Commissioner Michel Barnier told the Oireachtas Committee on European Affairs in Dublin today.
The strength of Irish exports, competitiveness and access to larger markets meant the country has “what it takes to win in the long term”, he said.
“I believe your future lies at the centre of Europe and Europe can help you. Make no mistake the answer to current difficulties in Ireland, and elsewhere in Europe must not be a retreat from common aims, policies and solidarities.
“If there is one lesson from the last year it is that we are all in this crisis together. What will help turn the Irish economy around again are exports and access to larger European markets".
Speaking at a business briefing at the Burlington Hotel in Dublin today, European Commission secretary general Catherine Day said bringing the public finances back under control was a necessary starting point for economic recovery. “There is no sound economic policy without that".
International reaction to the details of next year’s €6 billion adjustment, which will involve spending cuts of €4.5 billion and tax increases of about €1.5 billion, has been mixed.
Irish bond yields failed to stabilise following publication of the plan with the amount investors demand to hold Irish 10-year debt passing closing at 7.62 per cent (762 basis points), marginally below record highs.
The spread between Irish bonds and the German bund stands at 520 points. Documents released yesterday show the Government plan only assumes a small fall in borrowing costs next year to 6.4 per cent, dropping to 4.7 per cent in 2012.
Irish banking shares came under pressure today, with AIB falling 10.6 per cent to 26.8 cent, Bank of Ireland declining 13 per cent to 42.5 cent and Irish Life and Permanent off 19 per cent at €1.05.
International reaction to the plan, a first step in the process of reducing the budget deficit by €15 billion over four years, has interpreted the budget plan as a last-ditch attempt by the Government to restore confidence in the economy.
The Irish Times
