BRUSSELS (MNI) – The UK made an offer of financial assistance to
debt-stricken Ireland off its own back and it is very clear that the
country has not requested aid, UK Chancellor of the Exchequer George
Osborne said on Wednesday.

Osborne said he had discussed the situation with Irish finance
minister Brian Lenihan and offered UK support and that the UK was
considering a number of ways in which it could help.

The UK Chancellor wouldn’t be drawn on when this assistance might
be offered or the magnitude of such an offer.

“Britain’s approach is this, we are going to do what is in British
national interest,” Osborne told reporters after a meeting of EU finance
ministers here. “Britain stands ready to support Ireland in the steps
that it needs to take.”

“Ireland is our closest neighbour and it’s in our national interest
that…the banking system is stable,” he said.

“The assistance that we might provide, I’m not going to speculate
about that. There’s a number of avenues, we’re looking at all of those,”
Osborne said, adding that it was “very clear they have not requested
assistance.”

“The statement I made this morning was entirely off our own backs,
there was no request,” he said, adding that he had expressed his support
for Lenihan personally as well as for Ireland as a whole.

“On the exposure of the UK banks, we are very clear that the UK
banks have passed stress tests, are well capitalised, and our engagement
in this is because we are good neighbours of Ireland, not because we
have concerns about a particular UK bank,” Osborne said.

“Every step that we have taken in the past few months…has been
designed to move Britain out of the financial danger zone so that people
are not talking about Britain at the moment,” he added.

Leaving the same meeting, Lenihan told reporters that Ireland has
the backing of the whole of the EU and it needs to look at the facts and
make a decision based on them.

The country’s Prime Minister said earlier Wednesday that talks with
the European Central Bank, European Commission and the International
Monetary Fund would begin on Thursday with a view to finding the best
way to stabilise the economy.

Ireland is planning E15 billion of cuts over the next 4 years to
bring its deficit back below the EU’s 3% limit, but the market doesn’t
believe it will be able to cut its debt burden without external help.

Slower than expected growth and the cost of bailing out its banking
system will push Ireland’s budget deficit to 32% of its GDP this year.
The Irish government has committed to getting the deficit below the EU’s
3% limit by 2014. Stripping out the banks, the deficit will be around
11.9% this year, still one of the largest in the Eurozone.

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

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