EU Commissioners Olli Rehn and Michel Barnier have said the Irish situation has stressed the need for “bold steps” to be taken for tight economic co-ordination and strong EU-level regulation.

Speaking to the European Parliament’s economics committee last night, Barnier said, “The Irish situation shows us that we can only be stronger together.  We have to continue moving ahead with financial regulation.”

“Without rapid and real progress to reach true European economic governance we will spend the rest of this Parliament’s legislature discussing recurrent fiscal and sovereign debt crises around the EU,” added Rehn.

Discussing the Irish problems, Rehn said that the government had tools at its disposal to combat asset bubbles. Gay Mitchell had asked whether low interest rates leading to asset bubbles will be addressed in any future economic governance model.

Commenting further on Ireland, Mitchell also warned about the social upheavals which could occur as a result of the massive cuts being undertaken. He asked all parties to be “very careful on their comments” as the country is in a difficult position but is “handling it well and this needs to be recognised”.