Belfast Telegraph

Tuesday 29 July 2014

Kenny welcomes Merkel's 'support'

German chancellor Angela Merkel and Enda Kenny shake hands after a joint press conference (AP Photo/Michael Sohn)

The Taoiseach has welcomed pledges from Germany to help Ireland exit its bailout programme - despite getting no assurances on a deal for the nation's bank debt.

German Chancellor Angela Merkel dubbed Ireland a shining example of how Europe can emerge from the financial crisis. But she would give no details to Enda Kenny over a bank debt deal and whether European emergency funds would be available to refund past debts.

"I very much welcome the Chancellor's support to ensure successful completion of the programme and to realise sustainable re-entry to markets," said Mr Kenny, following talks with Mrs Merkel in Berlin. "Dealing with Ireland's banking and sovereign debt process is a key challenge for us."

He said the pair had agreed this would be given priority. However, Mrs Merkel said it was for European finance ministers to consider Irish sovereign debt sustainability.

"Our finance ministers have been charged with this and are in close contact in the euro group and at a bilateral level," she said. "I think the outcome of their work needs to be awaited to address the Irish problems."

The meeting in Berlin was scheduled as an opportunity for Ireland to prepare for its upcoming presidency of the Council of the European Union.

But all eyes were on Mr Kenny and Mrs Merkel following their last meeting in October, when they appeared to be on a collision course over whether a deal for Ireland would cover legacy debt.

Mr Kenny had claimed European Union leaders had given a clear affirmation on a decision to reduce the debt, following a key summit in Brussels.

But Mrs Merkel poured cold water on his claims just hours later, saying there would be no backdated recapitalisation of eurozone banks.

She did, however, repeat past claims that Ireland was a special case and that an agreement to separate its sovereign and bank debt - reached during a summit in June - remained. The chancellor has now reiterated those claims.

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