Chancellor Angela Merkel told German parliamentary leaders that it was unlikely she’d agree to cut interest rates on rescue loans to Ireland and Greece, said two officials present at the meeting.
Merkel told the lawmakers in Berlin this week that she didn’t expect the two countries to accept additional budget cuts she would demand in exchange for the bailout concession, according to the officials, who declined to be named because the comments were made in a closed-door meeting. The extra conditions would be aimed at keeping pressure on each country to curb spending, the officials said, without elaborating.
“We can’t artificially lower interest rates,” Merkel said in Berlin late yesterday after talks with Portuguese Prime Minister Jose Socrates. They “are ultimately an expression of confidence in a country.” Interest rates “have to reflect refinancing costs. We can’t get to a point where Ireland pays lower interest rates than Portugal.”
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