The FT reported that according to a European official familiar with deliberations in Seoul, the statement was put together after market turbulence led to “nervousness on the German side” that their tough stance was making Ireland’s position increasingly desperate.
Statement issued by the finance ministers of France, Germany, Italy, Spain and the UK from the G-20 meeting in South Korea:
“At its meeting on the 29 Oct 2010 the European Council discussed the future arrangements for ensuring economic and financial stability in the European Union.
Whatever the debate within the euro area about the future permanent crisis resolution mechanism and the potential private sector involvement in that mechanism we are clear that this does not apply to any outstanding debt and any programme under current instruments.
Any new mechanism would only come into effect after mid-2013 with no impact whatsoever on the current arrangements.
The EFSF (European Financial and Stability Fund) is already established and it’s activation does not require private sector involvement. We note that the role of the private sector in the future mechanism could include a range of different possibilities such as a voluntary commitment of institutional investors to maintain exposures, a commitment of private lenders to roll over existing debts or the inclusion of collective action clauses on future bond emissions of euro area member states.”
Minister for Finance Brian Lenihan responded:
“I welcome the solidarity shown by our EU partners and the G-20 with Ireland. The clarity provided by the EU Finance Ministers of the G20 is most welcome. The Statement makes it clear that any potential private sector involvement in that mechanism does not apply to any outstanding debt and any programme under current instruments. Any new mechanism would only come into effect after mid-2013. So this would have no impact whatsoever on the current arrangements.
Our EU Partners have confirmed their full confidence in the budgetary strategy being pursued by the Government.”
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