BRUSSELS (MNI) — There is no need to be concerned that Irish
politics will delay negotiations on an aid deal for Ireland, or
parliamentary approval of the country’s 2011 budget plan, a European
Commission spokesman said on Tuesday.

Ireland confirmed Sunday that it had requested formal talks with
the European Commission, European Central Bank and the International
Monetary Fund — the so-called troika — to negotiate the terms of an
aid deal, which will come with strict conditions attached.

But fear about delays to the proceedings have grown since Ireland’s
Green Party said on Monday it would quit the government coalition after
the 2011 budget is passed and the aid talks are completed, in order to
force a general election early next year.

“There isn’t any reason to be concerned about the discussions, or
the outcome of the discussions,” the spokesman for European Commissioner
for Economic and Monetary Affairs, Olli Rehn, said.

“We have to be monitoring not only the implementation of the
programme but all the parameters surrounding it,” he said. “We will
discuss that with the government in place in 2011, in 2012, in 2013, so
it’s not rigid.”

But he said the Commission was urging Ireland to pass its 2011
budget by December 2010 because “every day that passes has an impact for
the Irish economy.”

The spokesman said he was surprised to have read reports of the
final figure of Ireland’s aid deal, which have suggested aid could
amount to E90 billion. “There is no final figure yet,” and some
newspapers could end up having to correct their reports, he said.

The spokesman reiterated that the Commission hoped an aid deal,
which is to cover the four year budget plan and a separate three-year
memorandum of understanding for loans, would be concluded by the end of
November.

Passing the 2011 budget and getting a “sound credible consolidation
plan” approved is “crucial,” he said.

“The [budget] plan comes from the Irish government, it’s a budget
consolidation plan, a road map, from the Irish authorities, to meet
objectives which they have subscribed to with their European partners,”
the spokesman said.

He said the role of the Commission was not to stipulate measures
but to check that the measures being taken “point the country down a
safe road, down a risk-free road. This plan may be based on expected
growth levels and other macroeconomic factors agreed with the European
Commission.”

“We simply have to ensure that the road map is solid and will help
us to reach the final objective,” he spokesman said.

He said the three-year memorandum of understanding was a more
interactive process and formed the basis on which the loans would be
granted to Ireland.

It is “a more open discussion” and “a document which is negotiated
by the EU, ECB, IMF along with the Irish authorities,” he said.

The Commission spokesman said it was up to Ireland to decide the
exact tax rises and spending cuts which would help it achieve its goals,
but that “under current circumstances, and given Ireland’s situation it
would be hard to imagine Ireland continuing to be a low tax country.”

“Tax is an important instrument,” he said.

The spokesman said Greece’s budget deficit reduction programme
“remains broadly on track” and that the 201 reduction of 6 percentage
points is “even larger than initially targeted” and “good news.”

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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