An informal meeting of the Economic and Finance Ministers of the European Union was held in Dublin last week. A number of interesting points emerged from this meeting. However, they do not necessarily all point to a positive direction. They discussed the lengthening of maturities on loans made to Portugal and Ireland as well as tax evasion, information sharing and bank secrecy. This week Mario Draghi, the president of the European Central Bank (ECB), delivered a speech in Amsterdam, which is also worth commenting about.
The news about Portugal and Ireland is judged to be positive and Ecofin ministers agreed to extend the maturity on loans given to these two countries by seven years on condition that they continue to implement the agreed reform programmes. It needs to be remembered that these programmes also included cuts in salaries for civil servants and other forms of curtailment of public expenditure. Admittedly, the cause of the problem for these two countries was different.
The main problem of Ireland was the crisis in the financial markets and the need to bail out Irish banks. Portugal’s main issue was the size of the structural deficit caused by excessive expenditure.
↧