Taoiseach Brian Cowen, arriving for the summit of EU leaders in Brussels, on March 19, 2009

EU agree funding of €100m for Irish infrastructure projects from €5bn economic stimulus package; German ambassador warns of second Irish No to Lisbon Treaty

EU leaders on Thursday agreed a €5 billion economic stimulus package which will provide more than €100 million EU funding for Irish infrastructure projects. Meanwhile, the German ambassador to Ireland has defended remarks he made at a cultural event in Tralee, Co Kerry, in which he warned of the consequences of a second Irish No to the Lisbon Treaty.

At a summit in Brussels, which will conclude today, the leaders will consider a proposal from the European Commission to raise an extra €25 billion to help EU states that get into financial trouble during the current crisis.

“I think we have reached a compromise that everyone can subscribe too,” said Czech prime minister Mirek Topolanek, current head of the rotating EU presidency on the €5 billion stimulus package.

Germany agreed to support the package when it received guarantees that infrastructure projects not ready to begin in 2009 or 2010 cannot access the EU funds.

Finnish Prime Minister Matti Vanhanen said that for his country, the most important thing at the EU summit is to give a common EU position for the London G-20 summit on global financial regulation, which is due to meet on April 2nd..

"The heart of this financial crisis is in the banking system. We have to find a solution for the bad assets,"Vanhanen told reporters in Brussels.

 "The stimulus package will not be effective enough before we can solve the real problem,"he said.

Vanhanen said he hoped the EU leaders can reach agreement on providing more resources to the International Monetary Fund (IMF). He said his country is ready to commit more contributions.

Swedish Prime Minister Fredrik Reinfeldt also stressed the need to increase the capacity of the IMF.

The IMF offer “should be quite a large figure” of $75 billion to $100 billion, Czech Finance Minister Miroslav Kalousek told reporters late Thursday.

EU leaders have rejected calls from the US for much bigger spending measures.

“It is not time to look at more growth measures. I disagree with this idea completely,”said German chancellor Angela Merkel shortly before the EU summit began. “A competition to outdo each other with promises will not calm the situation,” she added.

In Tralee on Monday, German ambassador to Ireland Christian Pauls, was reported to have told an audience gathered for the official launch of a partnership between Tralee and the Frankfurt- Höchst Schlossfest, that Ireland would “throw away its future” if it voted No in a second referendum on the treaty.

The ambassador was also reported to have noted that rural regions such as Kerry returned a much higher No vote than urban areas in last year’s referendum.

He reportedly made pointed references to those who“complain about other nations fishing in their waters. . . and forget who pays their milk subsidies”.

“The reports make it sound like I was lecturing Ireland and the Irish but it was not meant to be aggressive or demeaning,”he told the Irish Times.

“A second No would have horrific consequences for Ireland and I am not the first to say it. I don’t think there is anything particularly new in that.”

The ambassador rejected suggestions his remarks could be considered undiplomatic.“They are not. I am simply conveying what my government thinks. That is my job.”

Pauls said that in the run-up to the first referendum on the Lisbon Treaty, foreign diplomats based in Ireland had “stayed quiet” on the issue because they did not want to be seen as interfering in the Irish vote. The ambassador said he no longer considered this necessary.

Germany has been the principal paymaster of Ireland's 40-year EU bonanza- a net contribution to the EU budget will only turn positive in 2013.