The European Commissioner for Economic Affairs Ollie Rehn.

The European Commissioner for Economic Affairs Ollie Rehn has agreed to consider separating Ireland's banking debts from its GNP ratio to provide a more accurate reflection of the state's wellbeing, on foot of a request from Irish MEP Gay Mitchell.

Mr Mitchell made the suggestion at a meeting of the European Parliament's Economic and Monetary Affairs Committee, which was addressed by Commissioner Rehn earlier this month.

Speaking after the meeting, the Fine Gael MEP said the inclusion of Ireland's banking debts on its national balance sheets "distorts" the appearance of our national finances.

"It's not just a matter of window-dressing; statistics matter," he said. "If our debt/GNP ratio is to be compared with that of Germany or Luxembourg, for example, it should be on the same basis. If the funding we had received had gone directly to the banks, it wouldn't be on our debt/GNP ratio and it would mean that our figures would be less disheartening," added Mr Mitchell.

The Fine Gael MEP admitted that removing our bank debts from the national balance sheet would amount to "an accounting exercise" rather than any actual write-down of the debt, but he said boosting international confidence in Ireland was an important goal.

Mr Mitchell said Commissioner Rehn had "seen the wisdom" in the proposal and would press for changes in the arrangements for Ireland which would recognise that our debt/GNP ratio is better than it looks. The EU economics chief had previously said that he has "sympathy" with Ireland's plight and would consider looking into a "readjustment" of the debt burden.