German finance minister "eu may come to aid of Ireland"

bodyofevidence · February 16, 2009, 10:36pm

From reuters this evening
reuters.com/article/bondsNew … 6320090216

DUESSELDORF, Germany, Feb 16 (Reuters) - Euro zone countries would be forced to come to the aid of a fellow member state if it encountered serious financial problems, Germany’s finance minister said, mentioning Ireland as a country in difficulty.
The comments by Peer Steinbrueck to members of his centre-left Social Democrats (SPD) at a conference in western Germany appeared to suggest a shift in Berlin’s stance towards its euro zone counterparts.
In recent months, Germany has come out against collective bailouts and suggested that other countries in the currency bloc who are experiencing acute financial problems have themselves to blame for not matching Germany’s fiscal discipline.
**Steinbrueck described Ireland, which has seen its credit ratings put on negative outlook due to worries about a deepening recession and widening budget deficit, as being in a “very difficult situation.” **
A short while later in his speech, Steinbrueck said: “The rules say that within the euro zone countries should not help each other.”
He then added: “If it came to a serious situation, all of the euro zone countries would have to help.”
**It was the first time a senior German official has talked openly about the financial problems in Ireland. Steinbrueck did not say whether Ireland had been the focus of specific talks among members of the currency zone.
The former “Celtic Tiger” economy has suffered a rapid reversal of fortune since its booming property market burst in 2007. Rating agencies have warned its “AAA” rating is at risk and Moody’s said in a report on “triple-A” rated countries last week that Ireland was among the most vulnerable nations with a top credit rating. **
Steinbrueck mentioned non-euro zone member Hungary as an example of coordinated action by the European Union in the case of financial difficulty.
He also expressed concern over the long-term inflation outlook, citing low interest rates and a proliferation of large stimulus packages

Open_Window · February 16, 2009, 10:40pm

Would that be an one step closer to the unexpected announcement from the EU?

random_punter · February 16, 2009, 10:41pm

Looks like lisbon is sorted then.

yoganmahew · February 16, 2009, 10:42pm

My guess would be a similar response to Hungary - medicine prescribed by IMF, medical card paid for by EU/ECB.

Orwellgeorge · February 16, 2009, 10:43pm

Seems the politicians are working in the ‘background’. This is supposed to ‘reassure the market’. It will probably have the exact opposite effect.

theschmuck · February 16, 2009, 10:44pm

I’m still voting no. I’d rather be poor than a subject of President Blair.

the_edge · February 16, 2009, 11:53pm

I, for one, welcome our new German overlords.

yoganmahew · February 16, 2009, 11:57pm

Ich bin ein berliner… would you like a jam one or a plain ring, herr oberfuhrer?

Lefournier · February 16, 2009, 11:58pm

As far as I can tell, Reuters are the only source for this story. After the travesty of their report on the Pope’s alleged “anti-gay = saving the rainforest” speech, alarm bells are ringing.

Does anyone have a link to the full text of his speech?

I note that Reuters make a link between Steinbrueck’s reference to Ireland and a comment made a

where he says two apparently very different things:

firstly, he makes the orthodox point that

He is then quoted as saying

Taking this at face value, he seems to be saying, not that Germany would help Ireland but that the Eurozone countries collectively “would have to help”. What form of help is not clear but it may not involve financial transfers. It could be e.g. an expression of political support or solidarity. There might be some leeway on State Aids or relaxation of the Stability Pact.

Frankly, I doubt if Steinbrueck is taking out a chequebook.

charmschooldropout · February 17, 2009, 12:18am

Does mean we might have to invade Poland?

Lir · February 17, 2009, 1:24am

An EU bailout, would this mean an opportunity to sweep our problems under the carpet? I really don’t think this is any kind of a solution. We need to do some major house cleaning and the only way this might be a possibility is if no one comes to our aid.

xman · February 17, 2009, 1:44am

Gunther, thanks for the €20 billion in structural funds and the €1.5 billion a year in CAP payments, but lookit we have a small problem with de economy. It was mostly your fault for investing in toxic American subprime mortgages, but you’ll be glad to hear I’m not going to point fingers.

Now I’ve thought about this and I’m sure you’ll agree that the best solution would be for you to give us another €20 billion to bail out our fine banking sector and then we can all get back to being good Europeans again.

And sure you know we were only joking when we voted no to Lisbon last year. We love the EU money, I mean the EU.

Gunther?

Hello, Gunther… ?

Rick_Flair · February 17, 2009, 1:45am

Contradictory ideas:

We have shown ourselves to have a corrupt incompetent political elite
Letting the EU have a bigger say in how the country is run is a bad thing.

At this stage, Id be delighted if the Germans came in and took over for a while. While they are at it, they might build re education camps for out thick apathetic mucksavage electorate.

dowtchaboy · February 17, 2009, 2:20am

Ah! common misconception there.
What Kresident Kennedy actually said, as he hopped up to the microphone dressed from head to foot in a black plastic bag was
“Ich bin ein Binliner”…

mikewest · February 17, 2009, 8:53am

I firmly believe the sausage reference was a purely fruedian slip on Kennedys behalf.

Meanwhile back OT. I believe that at some stage the EU will have to do something about Ireland because although we are only 1% of the Euro we are spinning out of control enough to do some serious damage to the whole thing. After the Irish excesses of the last decade they won’t like doing it and will look to extract their pound of flesh while stabilising the whole sorry mess. If this could happen while the scumbags who caused this mess are still in government all the better.

The EU’s problem at the moment is that every country has got problems and the scale of the problems in some of the other countries e.g. Spain, Greece and Hungry is greater than Irelands - yet. So far we are being let muddle through because although we are out of our depth we are still treading water and could possibly make it back to safety on our own if we make the right descisions. Greece and Hungry are running out of options faster than Ireland and they will need help sooner than us.

whizzbang · February 17, 2009, 8:58am

to be fair, they started it.

Ozzy · February 17, 2009, 9:52am

Yeah coming over here building our houses

Pill · February 17, 2009, 9:58am

I’ve been saying for a while now that the EU would assist (despite being ridiculed by people like bodyofevidence) and they will!

yoganmahew · February 17, 2009, 11:04am

I agree with you, although I do take issue with the word “assist”, I think “enforce” might be a more appropriate word…

MadPad · February 17, 2009, 11:10am

Lets hope so, I cant see there being much appetite within the EU to bail out the best paid central bankers, quangos and politicians in the world without some enforcement. The quicker it happens the better.