Schäuble defends Ireland euro bailout

Schäuble defends Ireland euro bailout
Photo: DPA
Finance Minister Wolfgang Schäuble has insisted Germany’s economy is safe despite the announcement that fellow euro zone member Ireland has asked for an international bailout of nearly €100 billion.

Schäuble told broadcaster ZDF on Sunday night that he was confident Ireland’s debt crisis could be contained without its spreading elsewhere in the euro zone.

“If we now find the right answer to the Irish problem, then the chances are great that there will be no contagion effects,” he said.

His comments followed the Sunday evening announcement by the European Central Bank that Ireland had – as has long been expected – asked for international help to stabilise its teetering banking system. Various media reported that the bailout was expected to total €80 billion to €90 billion.

Schäuble said the bailout was unavoidable and added it was a matter of ”defending our common currency” rather than any particular euro zone member.

Economy Minister Rainer Brüderle also strove to reassure Germany, saying the country’s celebrated economic recovery was not under threat.

“If help for Ireland does flow, this will not endanger the rebound,” he told daily Bild. “In addition, Ireland must undertake efforts so that its economy becomes competitive. I have no doubt that Ireland will do that successfully.”

Michael Heise, chief economist for Allianz, told the same paper he was confident the crisis in Ireland would not affect the German economy.

The European Central Bank said its governing council “welcomes the request of the Irish Government for financial assistance from the International Monetary Fund (IMF), the European Union and euro-area Member States.”

The request was ”warranted to safeguard financial stability in the European Union and in the euro area,” it said.

“The European Union and euro-area financial support, together with the IMF financing, will be provided under strong policy conditionality, on the basis of a programme negotiated with the Irish authorities by the Commission and the IMF, in liaison with the ECB,” it said.

“We are confident that this programme will contribute to ensuring the stability of the Irish banking system and permit it to perform its role in the functioning of the economy,” the statement said.

Dublin’s request for aid was approved by EU finance ministers during an emergency conference call on Sunday evening.

The Local/DPA/AFP

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