324 lines
9.2 KiB
Plaintext
Executable File
324 lines
9.2 KiB
Plaintext
Executable File
news
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worldnews
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europe
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ireland
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8138586
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-----
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# EU locked in survival crisis over debt
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## The European Union is locked in a "survival crisis" as Ireland resisted
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calls to take an international bailout.
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![The European Union is locked in a 'survival crisis' as Ireland resisted
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calls to take an international bailout. ][1]
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The Irish Prime Minister said yesterday that the country was confident that it
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could cope with its financial problems and criticised 'inaccurate' speculation
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about its problems Photo: AFP
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By Bruno Waterfield and Robert Winnett 7:28PM GMT 16 Nov 2010
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The President of Europe warned that countries needed to "work together" ahead
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of crucial talks designed to secure the future of the euro.
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Stock markets around the world fell sharply amid growing international unease
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over the growing crisis threatening the single currency.
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The deepening debt crisis in Ireland which has spread to other parts of the
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eurozone has left the single currency and European Union fighting for their
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"survival", Herman Van Rompuy warned.
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"We are in a survival crisis," he told an audience of Brussels policymakers
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yesterday. "We all have to work together in order to survive with the euro
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zone because if we don't survive with the euro zone, we will not survive with
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the EU."
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The comments helped spark a fall in share prices and the value of the euro
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across the world.
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## Related Articles
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* [The euro politicians who will decide Ireland's fate][2]
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17 Nov 2010
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* [Ireland resists bail-out as UK pledges 7 billion][3]
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17 Nov 2010
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* [UK pledges 7bn to help bail Ireland out of debt crisis][4]
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17 Nov 2010
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* [Euro crisis: Britain needs to prepare for an economic dark age next
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door][5]
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16 Nov 2010
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* [Eurozone debt crisis: Ireland says 'don't panic'][6]
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16 Nov 2010
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* [Irish 'contagion' hits Portugal][7]
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15 Nov 2010
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London's FTSE 100 index of Britain's biggest companies fell by 2.38 percent
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to 5,681. Bank shares including Lloyds TSB were some of the biggest fallers.
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In Paris, the CAC 40 lost 2.63 percent to 3,762, and in Frankfurt the DAX
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reduced by 1.87 percent. The Dow Jones fell by more than 200 points to below
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11,000 points.
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The Irish Prime Minister said yesterday that the country was confident that it
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could cope with its financial problems and criticised "inaccurate" speculation
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about its problems. However, he indicated that the country may seek
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international help for its banks to "reassure" the markets.
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In a statement to the Irish Parliament, Brian Cowen said: "The strategy being
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pursued by Government has addressed the difficulties facing the banking
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system, is bringing sustainability to the public finances and is resulting in
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ongoing improvements in competitiveness. Pursuing these policies is essential
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for a return to growth, the evidence of which we are already beginning to see.
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"The turbulence in the markets over recent weeks has been about issues of
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wider concern than Ireland's situation. It is appropriate therefore that we
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discuss with our partners, as we are, how these issues should best be
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addressed."
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However he also added: "We are engaged with our counterparts in relation to
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discussing with them how best be underpin banking and financial stabilities,"
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Last night, finance ministers from the eurozone were meeting to discuss plans
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to stabilise markets across the continent and the Irish were expected to come
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under growing pressure to agree to an international bailout.
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George Osborne, the Chancellor, is due to arrive in Brussels today to join the
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talks.
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"We are discussing with both the European Central Bank and the IMF and of
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course the Irish," Olli Rehn, the EU's Economic and Monetary Affairs
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Commissioner said. "The real problems are in the banking sector, not with the
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government, but these are connected."
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The Irish government has insisted that it can afford to repay its record
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debts, despite having an annual deficit equivalent to almost a third of the
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size of its economy.
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The growing market turmoil surrounding Ireland has also threatened to push
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Spain and Portugal into crisis. The cost of Spanish government borrowing rose
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sharply yesterday.
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Carlos Ocana, a Spanish Treasury minister, urged Ireland to stop the contagion
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spreading by acting quickly.
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"The important thing is that Ireland makes a decision as soon as possible," he
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said.
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But many EU countries will insist that any loans from EU emergency funds to
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Ireland will only be granted if Dublin signs up to an austerity programme on
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conditions set and enforced by the European Commission and the IMF.
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"You can't just throw money from helicopters. You have to create confidence in
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institutions, in the state, in public authorities," said Rainer Bruederle, the
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German Economy Minister.
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A full EU-IMF bailout would mean Ireland losing key areas of political and
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economic sovereignty. This would be deeply controversial and could cost the
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Irish government its majority. Senior German political figures yesterday
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suggested that Ireland should increase its corporate tax rates.
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British taxpayers could be left with a liability of more than £7 billion from
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an Irish bailout. However, the Treasury has yet to be formally approached to
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agree to any deal.
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"There have been no formal requests and we are not at the stage where we would
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be consulted," said a British government source.
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The Chancellor said the concerns and speculation surrounding the financial
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health of Ireland and Portugal showed economies are not free from the risk of
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collapse - though he insisted Britain is "out of the financial danger zone".
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The Chancellor said he did not want to add to speculation around Ireland's
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position but added that the country is taking "difficult steps" to address its
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fiscal situation.
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Mr Osborne told MPs: "I would make a general observation that what is going on
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at the moment highlights the fact that concerns about sovereign debt issues
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have not disappeared, and we should be grateful that thanks to the actions of
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this Government we have moved Britain out of the financial danger zone."
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[What are these?][9]
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* Share: [Share][8] [ ][10] [ ][11]
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[Tweet][12]
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http://www.telegraph.co.uk/news/worldnews/europe/ireland/8138586/EU-locked-in-
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survival-crisis-over-debt.html
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Telegraph
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## [Ireland][13]
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* ### [News »][14]
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* ### [Europe »][15]
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* ### [Finance »][16]
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* ### [Bruno Waterfield »][17]
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In news
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[![US President Barack Obama enjoys a pint of Guinness beer in Hayes Bar in
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the town of Moneygall, the hometown of his great-great-great grandfather][18]
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][19]
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### [Barack Obama's Ireland visit][19]
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[![Queen in Ireland 2011: interactive map][20] ][21]
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### [The Queen in Ireland: interactive map][21]
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[![The Queen in Ireland: day four of the state visit in pictures][22] ][23]
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### [Queen's Ireland visit: day 4][23]
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[![The Queen in Ireland: day three of the state visit in pictures][24] ][25]
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### [Queen's Ireland visit: day 3][25]
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[![The Queen in Ireland: day two of the state visit in pictures][26] ][27]
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### [Queen's Ireland visit][27]
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[X][8] Share & bookmark
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[What are these?][9]
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Share:
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* [ ][8]
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* [ ][10]
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* [ ][11]
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* [Tweet][12]
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* Advertisement
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![][28]
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## [Europe news »][15]
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[France news][29]
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[German news][30]
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[Italy news][31]
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[Spanish news][32]
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[Russian news][33]
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[European Union][34]
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Advertisement
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[Follow The Telegraph on Social Media »][35]
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