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Joint Eurobonds Will Happen: Irish Finance Minister

Shai Ahmed and Antonya Allen,

The euro zone will end up issuing joint Eurobonds, which would help support weaker members, Irish Finance Minister Michael Noonan told CNBC Wednesday.

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At 16:00 GMT (11:00 am New York time) the European Commission is expected to reveal proposals for tighter controls on euro zone member states' budgets which, if proven efficient, could lead in time to the issuing of common euro zone bonds.

Asked whether the joint Eurobonds were going to become reality, Noonan said: "I think we will in time, they're going to happen." "The sooner we have a Eurobond the better as far as I'm concerned but because we are already in a program we don't have the same degree of urgency as others," he added.

Exports have helped boost the Irish Economy but domestic concerns weigh for the longer term, the Noonan said.

"We're growing now for the first time in three years, we've had sustained growth since the start of the year and independent forecasts suggest that will continue for the next few years.

We need to increase confidence and ensure the successful areas continue to grow successfully," Noonan told CNBC at the Irish Business and Employers Confederation in Dublin.

Ireland was bailed out a year ago by the European Union to the tune of 85 billion euros ($113 billion) but has surprised many by managing to adhere to an austerity plan that appears to have paid dividends in recent months, and is being held up as a model for other troubled euro zone economies.

However, Noonan, who took up his position in March 2011, admitted that the domestic economy was still facing considerable challenges with low consumer confidence and a weak housing market.

"Yes, it's true the domestic economy is somewhat flat but the growth of the export-led economy is beginning to transfer across.

On the confidence side we are trying to give certainty to people so we have laid out the budget profiles from now to 2015 so that people will know what additional taxes they face and what additional expenditure cuts they're facing," Noonan said.

Ireland in Better Position He said Ireland was in a better position than some within the euro zone because of its program but wanted to see a Eurobond implemented as soon as possible.

"Because of this we are sheltered from the storms of what's happening in Europe but we fear the contagion that may run from the larger European countries but I think progress is being made now," he said.

Matthew Elderfield, Deputy Governor at the Central Bank of Ireland told CNBC that Ireland was different to some of the other countries in the euro zone.

"Last year has been a pretty tough year for overall markets, but in terms of Ireland it's started to differentiate itself by the actions it's taken to restructure its banks," Elderfield said.

"What we're doing to strengthen financial regulation has started to differentiate Ireland from the other countries in Europe and that's why the story about Ireland is becoming slightly different, you see the bond spreads haven't got sucked into the vortex of what's happening to the other countries," he added.

"Last year has been a pretty tough year for overall markets, but in terms of Ireland it's started to differentiate itself by the actions it's taken to restructure its banks" Despite the loss of sovereignty on fiscal affairs as a result of the bailout, Noonan said the sovereignty was maintained in many other areas.

"The test of whether the program is successful or not is whether Ireland will have its fiscal sovereignty restored and the trigger for that will be can we get back into the markets and access money in a couple of years time,” Noonan said.

In Berlin Wednesday German Chancellor Angela Merkel continued to dismiss the notion of a common Eurobond as "inappropriate" because it would give the impression the debt burden can be shared.