European finance ministers are struggling to reach agreement on the interest rate to be paid by Ireland for the €85bn of rescue finance it is set to receive from the EU and IMF - although they appear to have reached a settled position there should not be losses imposed on providers of senior debt to Irish banks.
The German finance minister, Wolfgang Schauble, is arguing that Ireland should pay a higher interest rate of around 7 per cent. His demand is thought to reflect the chronic unpopularity in Germany of the country's participation in bailouts of financially weaker EU states, such as Greece and Ireland.
So the German government feels that any rescue loans should not look like cheap money, but should be charged at an interest rate that contains an element of punishment for the reckless borrowing spree of Ireland's banks, which took the Irish economy to the brink of bankruptcy.
Note EU-Digest: Germany is right. Ireland does not really have the maturity as a nation to be a member of the EU. It also took two referendums for Ireland to agree to the Lisbon Treaty. Now they are benefiting once again from the safety net EU membership provides.
For more: BBC - Peston's Picks: Germany wants punitive interest rate for Ireland
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