Downing Street Says » Economy: Ireland

Asked if the Prime Minister was concerned about the situation in Ireland, the PMS said that this was a matter for Ireland. We had been in close contact with our Irish colleagues, as well as our other EU partners. The subject of enforcement of single market legislation was a matter for the European Commission to take forward, and they had already been setting out their views.

Asked if there was concern within the British Government that what was happening in Ireland could distort competition, the PMS said that when these decisions were taken in the interest of financial stability, they clearly had an impact on the single market. It was right that the European Commission should examine any state aid implications, just as they had done in relation to Northern Rock and Bradford and Bingley.

Asked if the Prime Minister believed that there was case for a Europe-wide response given the scale of the problem, the PMS said that this was clearly a global problem that required global responses. Clearly there was a European dimension to that, however what was happening in global financial markets affected different countries in different ways. Therefore it was right that individual countries would want to take their own decisions, particularly when national tax payers money was potentially at risk. If there were cross-border European issues that affected what was happening here then that was something that we would need to look at.

Put that that meant the Prime Minister was not in favour of a bailout in the EU like the one in the US, the PMS replied that nobody was proposing that.

Asked repeatedly if the British Government had raised the situation in Ireland with the EU Commission, the PMS said that we had been discussing this issue with our European partners, the European Commission and the Irish Government, as you would expect, and that the European Commission had already said that this was something that would need to be looked at in the normal way. The European Commission was simply doing their job, which did not require any prompting from us.

Asked about the conversations between the British Government, the Irish Government, European partners and the European Commission, the PMS replied that he was not going to get into specific discussions between governments, but we were in close contact with our European partners at this time, as you would expect.

Asked whether state aid rules prevented Britain from coming up with a similar guarantee to the one in Ireland, the PMS said that in relation to state aid rules, to date the European Commission had taken a constructive and flexible approach in the interest of protecting financial stability. That had certainly been our experience in relation to decisions that had been taken regarding Northern Rock and Bradford and Bingley.

Put that that process took time and that this country would be under pressure to follow the Irish method, the PMS said that in relation to Bradford and Bingley we saw quite rapid action from the European Commission.

Asked if all the big economies bailed out separately it might add up to something like a national bailout, the PMS said that the journalist was getting a long way ahead of himself; that was not where we were in this country at the moment. We had taken action when we had felt necessary, and, as the Prime Minister and the Chancellor had continually made clear, we stood ready to do whatever was necessary.

Asked if there were plans to extend what had happened with Northern Rock and Bradford and Bingley to other banks, the PMS said that our approach to date had been to deal with specific institutions where specific problems had arisen. We had also given general support to the banking system through the special liquidity scheme. We believed that was the right approach for Britain to date, but we kept all options under review, which you would expect. It was right that the approach we took was relevant to the specific circumstances that we faced in Britain.

Asked if the Prime Minister had talked to or if he planned to talk to the Irish Taoiseach at any stage, the PMS replied that we were in close contact with the Irish Government, as you would expect.

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» Thursday, October 2, 2008

Economy: Ireland

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