14 May 2012, 18:05  Noonan: Greece should stay in euro

However, he said that any new coalition in Greece should stick to its commitments under the EU-IMF rescue programme. Mr Noonan also said that any proposal to lend support to Spanish banks in a way which did not convert bank debt into public debt could be "interesting" from an Irish point of view. He said such a proposal could offer a parallel for Ireland in relation to the Anglo Irish promissory notes. Speaking in Brussels ahead of a meeting of euro zone finance ministers, he said he would encourage the Greek political parties to form a government that has pledged to implement the programme with whatever variations are necessary. ''I would like Greece to stay in the euro. It's very important that the euro zone stays intact," he said. He would not speculate on the implications for Ireland if Greece were to exit the euro. But he said that events in Greece had posed a "salutary lesson" for the Irish electorate. Mr Noonan said the Taoiseach's reference to a stimulus package ahead of the referendum was based on work done at a bilateral level on options for growth during meetings with the Chancellor Angela Merkel and later the Italian prime minister Mario Monti over the past number of months. He said the objective to have a demand stimulus got a strong fillip from the French elections. On the question of a financial transaction tax, Mr Noonan said he would have no reservations on any plans Francois Hollande had in mind if it was based on the tax currently in existence in France, which was 10 times smaller that the stamp duty on share transactions currently in place in Ireland. "Our difficulty with an FTT right through is we don't want a situation to emerge where there would be some imposition on financial services in Dublin which wouldn't apply in London," he said. Mr Noonan said the head of the IMF, Christine Lagarde, had raised the idea that any support for Spain should be for the banking sector and that any aid would not be transferred across onto sovereign debt. "She seemed to be outlining a new IMF policy position. We would watch it with great interest," he said. He said the source of the funding would be European and not IMF.

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