EU officials welcome end of aid for Ireland, SpainNovember 14, 2013 @ 12:39 pm
BRUSSELS (AP) - European Union officials welcomed the end of bailout support for Spain and Ireland, saying that showed the effectiveness of more than four years of efforts to cut excessive government debt.
Jeroen Dijsselbloem, the Dutchman who chairs the group of European finance ministers from the 17 countries using the euro, said Thursday "these economies are back on the road to recovery."
Ireland got 67.5 billion euros ($91 billion) in a bailout after failing Irish banks ruined its finances. Spain tapped 41 billion euros of a possible 100 billion-euro credit line from the eurozone countries' bailout fund to recapitalize banks that faltered after a real estate boom collapsed.
Both countries said they would not seek further aid. Ireland's aid program ends Dec. 15, Spain's in January.
Greece, Portugal and Cyprus remain on international bailout support as a result of Europe's troubles with too much debt.
European officials stressed they still face many economic challenges. Growth is sluggish and levels of debt remain high in several countries. Greece in particular needs to make more progress in straightening out its finances, they said.
Officials said the exit of Ireland and Spain from aid programs proved the correctness of the eurozone's basic approach: loans to keep struggling countries afloat, coupled with strictly enforced conditions to reform.
"We have now had two successful experiences and I think this is very important," Dijsselbloem said.
The tough conditions, however, have helped worsen unemployment, deepen recessions and provoke social unrest as governments cut spending and raise taxes.
Eurozone finance ministers also discussed financial backstops after a yearlong review of bank finances by the European Central Bank turned up banks that need more financing. Dijsselbloem said those banks would have to raise money from financial markets or investors and get help from national governments only if that fails. If their home governments can't afford to help, only then could banks turn to the eurozone bailout fund, the ESM, under strict conditions.
Finance ministers from all 28 EU countries faced a tough discussion Friday on more wide-ranging measures to toughen oversight of banks and keep their troubles from hitting government finances.
The EU's executive commission has proposed an agency that could order a bank to be restructured or wound down, backed by a fund raised from a levy on banks.
Germany, the EU's biggest member, has said setting up the agency will require changing the basic EU treaty, which could take years. Germany has said the EU should rely instead on a network of national bank rescue authorities. The European Central Bank and other governments say the fund can be passed under the current EU treaty.
Officials say they need a deal by the end of this year to get the measure through before the current EU parliament's term ends in May.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
The 49ers slipped by the Seahawks in a bare-knuckle brawl, reports Danny O'Neil
Pot for Pets
This pot has gone to the dogs, and cats
The Holiday Map
Find lights, Santa photos, tree farms & seasonal events with our holiday map
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.