German Chancellor compares Slovakia and ireland as opposite ends of the spectrum in economic wellbeing

In an unprompted reference to Ireland Merkel gave the strongest signal yet that Berlin might act under Article 100 of the Maastricht Treaty, allowing financial assistance for countries experiencing “difficulties caused by natural disasters or exceptional occurrences beyond its control.”

“Of course there is a certain room to manoeuvre in the stability and growth pact and a country like Ireland that has been hit quite hard by the banking crisis is clearly in a different situation to a country like Slovakia with fewer banks and where the distorting forces at work are weaker,”

Merkel told the foreign press in Berlin. “We have shown solidarity and that will remain so. We should use Sunday’s summit for member states affected to give an honest report of their situation.

German officials have said that assistance for several EU members, including Ireland, is all but inevitable. They are now “brainstorming” possible options and are considering making individual preconditions for each aid recipient. One request could be for Ireland to increase its corporate tax rate of 12 per cent, which has lured to Dublin many leading German companies, and their tax revenue.

The implications of the above are two-fold, firstly Slovakia's courage in introducing the EURO on time and with full merit is paying huge dividents in comparison with basket-cases like Romania and Bulgaria.

Slovakia's low national debt at around 35% is also proving the wisdom of the tough criteria of the Maastricht treaty prepared our small country well for the torrent of destabilising events in the world economy.

Ireland and the anglosaxon model of financial services intermediaries forming the backbone of the economy is proving to be a fairly illusory backbone indeed but crucially its the crazy borrowing that needs to stand trial for the predicament of Ireland.

Conclusion: be liberal in all things but be extremely conservative in finances...

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