Easing the burden

As EU finance ministers consider easing the terms of a bailout package for Athens, the Irish government has hinted that Dublin would expect similar treatment.

Irish Energy Minister Pat Rabbitte told Irish state broadcaster RTE on Sunday that the government wanted a relaxation of interest rates it must pay to borrow money in the light of the plan to revise the Greek terms.

"Quite frankly the [interest] rate on Ireland must be reduced and, in my own view, the debt must also be rescheduled," Rabbitte said.

The minister said Dublin intended to "take advantage of developments elsewhere in the hope that there will be a multilateral approach to renegotiating [the] bailout."

The sustainability of Ireland's debt burden still depended upon economic growth prospects, the governor of Ireland's central bank, Patrick Honohan, said Sunday.

"If things don't go well in terms of economic growth it will be much more difficult," said Honohan. "In that case there will be a problem and in order to cope with that situation we need to think of better financial arrangements with Europe."

There is already a growing acknowledgement that new plans will need to be put in place for Greece to tackle its own debt issue.

Finance ministers from the eurozone's top four largest economies - France, Germany, Italy and Spain - met on Friday to agree on "the next steps" in supporting Greece.

"We think that Greece does need a further adjustment program," said Jean-Claude Juncker, chairman of the eurogroup of finance ministers. He added that the matter would be discussed at a full meeting of eurozone finance ministers on May 16.

Tough measures, little progress

Despite agreeing to tough austerity measures to reduce its debt, Greece has so far been unable to reduce its deficit significantly with efforts thwarted by recession and low government revenues due to widespread tax evasion.

A 110-billion-euro ($157 billion) rescue package was agreed with Greece in May last year, with an 85-billion-euro scheme put together for Ireland in November.

Any changes to rescue package conditions could also benefit Portugal and its 78-billion-euro economic bailout package, agreed to last week. In return for the resuce fund, Portugal is being asked to reduce its public deficit from 9.1 percent of gross domestic product last year to 3 percent by 2013.

'No plans to quit eurozone'

Greek Prime Minister George Papandreou on Saturday denied a report on the website of German news magazine Der Spiegel that Greece was considering quitting the eurozone. He asked for the country to be "left alone to finish its task."

"No such scenario has been discussed even in our unofficial contacts. I call upon everyone in Greece and abroad, and especially in the EU, to leave Greece alone to do its job in peace," he said.

Frank Schäffler, a German member of parliament from the Free Democrat party, said Saturday that Germany should constructively support Athens if it chooses to leave the eurozone.

However, his party colleague, Economics Minister Rainer Brüderle, is said to oppose such a move.

"I am not in favor of that," the news agency Reuters reported Brüderle as saying on Sunday. "I am rather of the opposite opinion. Our aim must be to make Europe stronger."

Author: Richard Connor (AFP, dpa, Reuters)
Editor: Martin Kuebler