BRUSSELS (MNI) – The European Commission on Tuesday played down the
prospect of a second financial assistance package for Ireland, despite a
call from the International Monetary Fund for “further strengthening
European support,” saying that the first package was producing results.

“It is not particularly useful to open a public debate about the
possibility of a successor program for Ireland when [the first program]
is delivering in spite of difficult conditions on the external side,” a
spokesman for the Commission told journalists.

The IMF said last December that “further strengthening of European
support for Ireland’s recovery would reinforce prospects for program
success, with benefits for European stability.”

Although it praised Ireland, which has secured a nearly E70 billion
bailout from EU countries and the IMF, for its “exceptional track
record” in implementing reforms, the IMF warned that the country’s plans
to return to the bond market could stumble if international growth,
especially in the euro area were to weaken.

Turning to Greece, the spokesman for the Commission said that “no
precise date” had yet been set for a return to Athens by officials from
the Commission, IMF and European Central Bank to assess Greece’s
progress on meeting the conditions tied to its EU-IMF bailout. There
are, however, “no preconditions as such” that Athens needs to meet, he
said.

European Commission Vice President for Economic and Monetary
Affairs, Olli Rehn, is to meet with Hungarian Finance Minister Tomas
Fellegi on January 20 to discuss Hungary’s compliance with the EU’s 3%
public deficit cap as well as Budapest’s request for financial
assistance from the EU and IMF.

The Commission in December identified Hungary and four other
countries — Belgium, Malta, Cyprus and Poland — as having public
deficits that risk exceeding the 3% limit in 2012, which under tough new
EU rules could lead to intensified scrutiny by Brussels and eventually
financial penalties.

Brussels and the IMF broke off preliminary talks with Budapest
about a financial aid package to help the government cope with a
crashing currency and soaring borrowing costs after Prime Minister
Viktor Orban put forward new laws, since enacted, that the Commission
fears compromise the independence of the national central bank.

–Brussels bureau: +324-9522-8374; pkoh@marketnews.com

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