Cut in bailout debt rate fair and vital for sustainability, says Barroso

JOSÉ MANUEL Barroso, president of the European Commission, said yesterday reducing the bailout debt rate for Ireland and Greece was not only fair but would assure sustainability of the debt.

Costs which would be “very, very difficult for our Greek or Irish citizens to pay” could not be imposed. Mr Barroso said all member states must express solidarity but also shoulder responsibility.

He also said while there was opposition to the common consolidated corporation tax base in some quarters, the commission believed it was important for the completion of the single market.

Mr Barroso stressed the importance of adopting a “spirit of solidarity with all other member states”. He said what had emerged from yesterday’s European Parliament session in Strasbourg was pessimism, and he told MEPs their pessimism reflected the dominant feeling in Europe today.

However, he said political courage was necessary.

“The challenge we need to solve is our economic renewal,” he said.

Confidence was necessary, he said, and it depended on Europes capacity to modernise, innovate, become more sustainable and competitive.

The session debated the conclusions of the recent European Council summit meeting.

Economics commissioner Ollie Rehn told Irish MEPs the commission had confidence in the results of bank stress tests announced last week.

During the private meeting, Irish members of the European Parliament told Mr Rehn that Irish taxpayers could not bear the burden of both the public finances restructuring and the restructuring of the banks, Dublin Fine Gael MEP Gay Mitchell said after the meeting.

“We’re really in the process of saying to him there’s a real problem and we want a real solution. Please don’t ask us to carry a burden that we cannot carry. We will discharge all our responsibilities, but we cannot take everybody’s responsibilities on board.”

Labour Party MEP for Dublin Proinsias De Rossa said various member states had to understand Ireland’s problems were also Europe’s and countries had to act as partners to achieve a common solution. “In order for Ireland to survive, we need a break on the interest rate. We need an extension of the time in which we repay the borrowings and we need the elbow-room to ensure that the economy can grow and we can create jobs, and be able to pay back the loans,” Mr De Rossa said.

Fianna Fáil MEP North West Pat the Cope Gallagher insisted there was “total solidarity” among Irish MEPs in relation to the issue.

However, Sinn Féin MEP Bairbre de Brún said: “Ireland will default if it is asked to carry along on this road.”

Separately, secretary general of the commission Catherine Day’s description of the EU-IMF bailout as “tough but sustainable” was strongly criticised by Independent MEP for Ireland North West Marian Harkin.

Ms Harkin insisted Ms Day, who is Irish, was “also wrong” when she said recently the economic crisis was “not a crisis of the euro” but rather a crisis of individual countries in the euro zone.