25th May 2019

Germany open to bail-out of a eurozone country

  • Is Germany's tough stance towards help for other eurozone countries softening? (Photo: wikipedia)

Germany has for the first time publicly raised the idea of bailing out nations in the eurozone that are struggling in the face of the economic crisis, mentioning Ireland in particular.

"We have a number of countries in the eurozone that are clearly getting into trouble on their payments," said German finance minister Peer Steinbrueck, according to Reuters.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"Ireland is in a very difficult situation," he noted.

"The euro-region treaties do not foresee any help for insolvent states, but in reality the others would have to rescue those running into difficulty."

The comments, made at a Social Democrat conference on Monday, appear to represent a shift in Berlin's thinking, with Germany previously indicating that countries with ailing economies would have to solve their problems themselves.

Ireland, once famed for it booming economy and nicknamed the Celtic Tiger, has been particularly hit by the financial crisis which has seen its property market implode.

Its top credit rating is at risk, rating agency Moody has warned and it suffers from a yawning budget deficit - this year predicted to rise to 11 percent of GDP, smashing through the rules of the eurozone, which limit budget deficits to three percent of growth domestic product.

Credit default swaps (CDS) on Irish Government bonds rose to 386 on Tuesday, prompting the Ireland's Department of Finance to release a statement that conclusions about the "soundness of Ireland's public finances" should not be drawn on the basis of credit default swaps.

A rise in the rates is a sign that market is nervous about credit quality. Greece, Spain, and Austria have also seen strong hikes in default costs.

Meanwhile, later today (18 February) European Commission is set to underline the worsening economic situation in Europe when it publishes budget deficit forecasts for a series of eurozone countries.

Alongside Ireland, eurozone members France, Greece, Malta and Spain are all to be warned on their debt, as will non-euro member Latvia.

The commission, which is struggling to contain the both the economic and political fall-out from the global financial crisis, is expected to issue just a formal warning, but is unlikely to set a strict timetable for returns to budget discipline.

In total, the commission will assess the spending plans of 17 member states on Wednesday - Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Latvia, Malta, the Netherlands, Poland, Spain, Sweden and the UK - at a time when governments are borrowing heavily to try to spend their way out of the crisis.

Assessment of the remaining ten member states will take place later in February.

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

EU and Japan in delicate trade talks

The Japanese PM comes to Brussels to discuss the first results of the new EU-Japan free trade deal, plus WTO reform - a sensitive topic before he moves onto Washington to face Donald Trump.

News in Brief

  1. UK's May announces June 7 resignation date
  2. Ireland votes for EU election and divorce referendum
  3. Report: May to announce resignation plan on Friday
  4. Leading politicians: time for EU to have female leaders
  5. Poll: Finland's Green party to surge in EU elections
  6. High demand for postal voting in Denmark
  7. Some EU citizens turned away at UK polling stations
  8. Switzerland unlikely to sign draft EU deal


Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Latest News

  1. EU election results to trigger top jobs scramble This WEEK
  2. Don't tell the Dutch - but Timmermans 'won'
  3. EU says goodbye to May with 'respect'
  4. Strache scandal: how big a hit will Austrian far-right take?
  5. Italy train row exposes competing views of EU
  6. Dutch socialists on top in first EP election exit poll
  7. No usage data kept for EU parliament's 'Citizens' App'
  8. EU sanctions regime cannot be an 'EU Magnitsky Act'

Join EUobserver

Support quality EU news

Join us