Ireland faces severe budget cuts to woo eu creditors

Ireland’s new government will stick to the budget targets laid down in an 85-billion euro EU/IMF rescue package as it seeks to win European partners round to giving it easier terms on the loans.

Ireland’s prime minister in-waiting Enda Kenny is under huge pressure to persuade Europe’s paymaster Germany to cut the interest rate Brussels is charging and give Dublin more time to restructure its banks before a Europe-wide deal on the debt crisis is hammered out at summit on March 24-25. The coalition agreement between Kenny’s Centre-right Fine Gael party and the Centre-left Labour party, clinched shortly after midnight, seems designed to curry favour with the fiscally conservative Germans and draws a veil over some of the anti-EU rhetoric deployed in the election campaign.

“We have to repair broken bridges across our European partner to build up an understanding of our position,” Brendan Howlin, one of the chief negotiators for the Labour party, told state broadcaster RTE. “It is in everybody’s interest, not only the national interest of Ireland, but in Europe’s interest and in the interests of the maintenance of the euro that we have a path that is sustainable out of the economic hole that we find ourselves now in.”

Source: Financial Post