Members of the Eurogroup meeting in Brussels on 16 November held a discussion over the difficulties Ireland is facing in its budgetary, competitiveness and financial sector areas. Ministers, who also reviewed the situation in Portugal and Greece, agreed on taking any coordinated action, in close collaboration with the International Monetary Fund, in order to safeguard the financial stability of the Euro area.

In their statement, members of the Eurogroup welcomed the efforts made by Ireland to deal with the challenges the country is facing to ensure the stability of its budgetary, competitiveness and financial sector areas. The four-year strategy which is to be announced by the end of the month is expected to ensure that the public debt ratio will be put on a firm downward path and be an anchor fort the 2014 target date for the correction of the excessive deficit.

Together with the structural reforms that will be announced in the strategy, this budgetary adjustment should allow Ireland to return to a strong and sustainable growth path while safeguarding the economic and social position of its citizens.

Commission, ECB and IMF action in Ireland

The Eurogroup welcomed the determination of the Irish government to engage in a short and focussed consultation with the Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) in order to determine the best way to provide any necessary support to address market risks, especially as regard the banking sector, in the context of the four-year budgetary plan and the upcoming budget.

The Eurporoup agreed to send a small team of Commission, ECB and IMF officials to Dublin in order to prepare an eventual rescue of Irish financial sector, should Ireland finally make such request to its partners.

Portugal and Greece: more reforms

Ministers also debated on the Portuguese and Greek situation. They welcomed Portuguese Government commitment to ensure public deficit reduction by 4.6% of GDP in 2011, and the draft budget proposal recently released, but invited the Portuguese authorities to further specify future reforms, intended to enhance potential GDP growth and competitiveness . These reforms are focused on removing rigidities in the product and labour markets, including in wage formation, and improving productivity.

In the case of Greece, the Eurogroup acknowledged the measures taken to comply with the adjustment programme implemented further to EU aid package granted in May 2010, and stressed in particular the need for further expenditure reductions, as well the acceleration and deepening of structural reforms in particular in the area of taxation, labour markets, business environment, health care and the efficiency of public administration.