THE European Union (EU) has warned the Irish government and opposition parties there must be political consensus on budget measures to ensure international markets continue lending to the country next year, according to an Irish newspaper report.
An agreement in cross-party talks involving Prime Minister Brian Cowen; the leader of junior coalition partner, the Greens; and the leaders of the two main opposition parties, Fine Gael and Labour, would increase international confidence in Ireland’s ability to bring its €18bn (£15.7bn) budget deficit back within Eurozone guidelines, according to a spokesman for Olli Rehn, the EU economics commissioner.
“From a political point of view, there is no doubt that strong political support of the plan will inspire more credibility,” said Amadeu Atlafaj Tardio told the paper.
“It is not about convincing the European Commission or even the member states of the euro area which will also discuss these issues. It is about convincing all the market forces beyond the European institutions, which will have a determining role to play.
“One of the lessons of the sovereign debt crisis that we have learnt is that the referee is not only the European institutions; there are other referees in the game that play a major role... the rating agencies, the market players.”
Cowen wrote to the leaders of the main opposition parties on Wednesday inviting them to talks about a possible consensus on how to tackle the worst budget deficit in the European Union.