Ireland confirms EU bailout deal

22/11/2010| IslamWeb

Eurozone finance ministers have backed a request from Ireland for an international bailout from the European Union and the IMF.

In a statement, the ministers said the EU and the European Central Bank had agreed the assistance "to safeguard financial stability in the EU and euro area".

The statement underlined that other non-euro EU nations, over and above Britain and Sweden, which have already offered bilateral assistance, could yet join the effort.

Brian Cowen, Ireland's prime minister, confirmed the decision at a news conference in Dublin, the Irish capital, on Sunday.

The confirmation came after a series of conference calls gathering European partners and G7 counterparts from the US, Japan and Canada, amid pressure to plug a giant hole that has already seen the Irish government pump $70bn into its failed banks.

Speaking in Brussels, Ollie Rehn, the EU economic commissioner, said the loans would be provided to Ireland over a three-year period.

Ivan Miklos, the Slovak finance minister, said the bailout, which would be the second rescue package for a eurozone country this year, would total less than $140bn.

Miklos said Dublin had asked for help under the European Financial Stability Facility (EFSF), a temporary budget safety net.

"Ireland has asked for help from the EFSF and Slovakia has joined other eurozone partners and approved this," he told the Reuters news agency.

The Reuters news agency quoted senior EU sources as saying the loans would total $110bn to $125bn.

Speaking to Al Jazeera John Walsh, the editor of Business and Finance magazine, said Ireland will have to pay "a very, very high political price" for the crisis.

'Intensive discussion'

Earlier, Brian Lenihan, the Irish finance minister, had said he would recommend to the cabinet that the government should apply for the financial bailout program from the EU and the IMF.

The Irish cabinet met on Sunday to finalize a four-year deficit crisis plan which had been seen as key to winning the international bailout and easing fears about the future of the euro.

Lenihan said market conditions had been very difficult since late August.

He added that since a visit to Dublin a fortnight ago by Rehn, "market conditions had impacted on the banking sector in particular".

Concerns are growing that the huge deficit racked up by the one-time "Celtic Tiger" as it tried to save its banks could have a knock-on effect on other weak economies like Portugal, echoing the Greek crisis earlier this year.

PHOTO CAPTION

A person withdrawals money from a AIB Bank Automated Teller Machine in Dublin, Ireland November 21.

Al-Jazeera