SEOUL (AFP) – European Commission president Jose Manuel Barroso said Thursday that the EU stood ready to support Ireland "in case of need", after Irish bond yields soared to record levels on public debt fears.
"What is important to know is that we have all the necessary instruments in place now to support Ireland if necessary," he told reporters, when asked whether the EU would bail out Ireland as it did Greece earlier this year.
European Commission president Jose Manuel Barroso said Thursday that the EU stood ready to support Ireland in case of need. AFP
Irish bond yields saw their biggest one-day leap on Wednesday since the launch of the euro in the face of mounting investor unease at the country's shaky public finances, placing the European bond market under serious strain.
Speaking in the South Korean capital ahead of a G20 summit of world leaders, Barroso, who heads the European Union's executive arm, said that "in case of need, the EU is ready to support Ireland".
"We are monitoring the situation closely," he said, but "we support the efforts of the Irish authorities" to combat a deficit that has ballooned thanks to bailouts of cash-strapped banks.
Irish 10-year bond yields Wednesday jumped at one point to 8.180 percent, the highest since 1999, despite assurances by Ireland's prime minister that the country would not be forced to access a European bailout fund.
Eurozone bonds came under serious strain Wednesday as investors took flight, with Portugal and Ireland -- besides Greece -- struggling to rein in public debt.
Ireland's crisis has raised the spectre of a repeat of Greece's near-bankruptcy.
In May, Athens' plight forced European governments to endorse a 110 billion euro (150 billion dollar) bailout package and raised questions over the future of the euro.
Ireland's government insists it can avert disaster. It is due this month to unveil a four-year programme of austerity budgets that will involve a 15 billion euro correction to rein in a gaping public finances deficit.
The EU already provides long-running guarantees on certain liabilities held by the country's crisis-hit banks.