10:11 AM
Ireland says no need for nor talks on EU rescue
Addison Ray
By Carmel Crimmins and Annika Breidthardt
DUBLIN/BERLIN | Sun Nov 14, 2010 12:02pm EST
DUBLIN/BERLIN (Reuters) - Ireland said on Sunday that it neither needed nor was discussing EU financial aid and denied reports that the European Union was pressing it to accept emergency funding.
EU sources over the past two days said that talks on possible aid were under way and that Ireland was unlikely to hold out without assistance.
The European Union is keen for Ireland to accept aid, sources have said, to avert a Greek-style scenario where budget problems in one country plunge the entire euro zone into crisis.
Irish minister of enterprise, trade and innovation Batt O'Keeffe told national broadcaster RTE that Ireland was not like Greece in that it was funded until mid-2011 and that it was not discussing any bailout package with the European Union.
"No. It hasn't arisen. We have every confidence that we will be able to manage this economy," he said. "It's been a very hard-won sovereignty for this country and this government is not going to give over that sovereignty to anyone.
He added that the International Monetary Fund had stated it believed Ireland could manage on its own.
Germany, the EU's chief paymaster, said it was not exerting pressure on Ireland to accept aid.
EU sources said the range of aid under discussion was 45-90 billion euros ($63-123 billion), depending on whether Ireland needed support for its banking sector, driven into debt by the financial crisis and a property market crash.
Such aid, if it were needed, could come from an initial EU bailout mechanism or from the 440 billion euro European Financial Stability Facility (EFSF) set up after Greece was forced to seek help in May.
PORTUGAL STILL UNDER SCRUTINY
The source said Dublin was not keen on applying for emergency funding, but that it may not have a choice if it came under renewed attack in financial markets.
Ireland has blamed Germany for aggravating its woes by pushing the idea of asset value reductions or "haircuts" for private bondholders in a future rescue mechanism from 2013 which sent spreads wider on bonds of euro zone peripheral nations.
German Chancellor Angela Merkel was quoted as saying at last week's G20 meeting that markets must understand that politicians cannot keep asking taxpayers to pay for losses incurred by investors when markets turn against them.
Ireland's borrowing costs shot to record highs in the past week on concerns about a deficit set to hit 32 percent of gross domestic product this year and worries private bondholders could be forced to take such "haircuts" on their holdings.
The focus on Ireland has not helped ease pressure elsewhere in the euro zone periphery.
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