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Radicova: Slovakia Approves Irish Bailout and Offers Four Suggestions
Wednesday 24 November 2010 Zoom in | Print page
Bratislava, November 24 (TASR) - Slovakia is ready to provide a loan to Ireland within the European Financial Safety Framework (EFSF), but has four suggestions for managing the situation, Prime Minister Iveta Radicova (SDKU-DS) said at a press conference on Wednesday.
Firstly, "we insist ... that proceeding in this way can't be a long-term solution," said Radicova. If further countries follow suit, the whole system will crumble. Therefore, "changes in the Stability and Growth Pact must be adopted as soon as possible," she said.
Secondly, Radicova cautioned that the eurozone's indebtedness rises through providing loans to countries and that this needs to be addressed on a country-by-country basis. "Without resolving specific problems and changing financial structures in individual countries there is no way out of the crisis," said Radicova {especially given that other European economies are facing economic problems on a similar scale to Greece and Ireland}.
Thirdly, she stressed that in Ireland's case it will be again taxpayers who will bear the burden, and hence the private sector should be conjoined in the rescue effort. The objective being that "banks won't be motivated to endlessly lend money without hesitation, and at a certain point ask for help. As long as the guarantee of the financial mechanism is in place, banks have no reason to change their behaviour," said Radicova.
The fourth suggestion is to alleviate the pressure on Ireland to raise taxes, which would eventually lead to worsening living standards – which would in turn cause political instability in the country, according to Radicova.
According to the latest reports, the loan for Ireland (pop, 6.2 million) should amount €85 billion, with Slovakia's share reaching one percent of the sum.
Finance Minister Ivan Miklos (SDKU-DS) said that Ireland's economy is in a different situation than Greece, which had been falsifying data on public finances for years. "Ireland is in principle a competitive economy [that has experienced a collapse in property values]," said Miklos.
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