DUBLIN (Reuters) - A senior Irish government minister believes it is inevitable that the European Union will allow some form of debt forgiveness to ease Ireland’s debt burden, The Irish Mail on Sunday newspaper reported.
“My personal view is that an element of debt forgiveness down the road is likely to become inevitable and I think in the meantime the leadership in Europe has to apply itself to the fault lines that we are exposed to in the architecture of the euro,” Pat Rabbitte, the energy minister, was quoted as saying.
Global policymakers held an emergency conference call on Sunday to discuss the twin debt crises in Europe and the United States and Rabbitte said he believed that the European Central Bank would block any options for U.S.-style quantitative easing.
“It would not be contemplated by the ECB. The ECB is very much influenced by the requirement to keep inflation under control. It may be interesting to see as the Obama thing unfolds, but I don’t see the ECB giving that sanction in Europe,” he was quoted as saying.
Euro zone leaders recently agreed to cut the cost and lengthen the maturity of Ireland’s European loans extended as part of an EU-IMF bailout last year.
European leaders have been at pains to stress that the debt restructuring they agreed for Greece, also recipient of a bailout, will not be replicated and Ireland’s government has said repeatedly it will honour its sovereign debts.
Ireland plans to return to debt markets late next year.
Reporting by Carmel Crimmins; Editing by Mike Nesbit