FINANCE MINISTER Brian Lenihan has said there is “considerable shock” among his European Union counterparts over discussions on whether Ireland should sidestep its debt obligations and default.
RTÉ News quotes Lenihan, speaking from Brussels following a meeting of EU finance ministers today, as saying the open debate on whether Ireland should disown its national obligations was damaging the country’s credibility among its peers.
“There’s considerable shock at the whole debate in Ireland about bond default,” Lenihan said, “and they see that as something that’s deeply damaging to confidence in the Irish system.”
The EU’s economics commissioner Olli Rehn later said that while he was reluctant to describe the feeling among European finance ministers as ‘shock’, he acknowledged there was some concern about the prospect of Ireland backtracking on its debt obligations – and how that might affect the reputations of other European nations.
“It is certain that there is no appetite for considering senior debt bondholders in this context, because we want to avoid any kind of potential contagion effect,” Rehn said.
“Therefore, this issue is not on the table.”
The meeting followed a decision by Eurozone ministers to revamp the European Monetary Union’s bailout fund, turning the €440m European Financial Stability Fund into the €500bn European Stability Mechanism.