Ireland and EU agree to multi-billion aid package

November 22nd, 2010 - 8:59 pm ICT by BNO News  

DUBLIN, IRELAND (BNO NEWS) — Ireland could be receiving between €80 billion and €90 billion ($110 to $123 billion) as European Finance ministers have agreed to release a multi-billion euro assistance package for the country.

Irish Prime Minister, also known as Taoiseach, Brian Cowen and Minister for Finance Brian Lenihan confirmed the decision to seek the bailout from the European Commission, the European Central Bank and the International Monetary Fund (IMF) during a press conference, although a specific amount was not disclosed. The program is expected to last three years.

According to a Government source, reports indicate that the main achievement in the negotiations was protecting the 12.5 percent corporation tax which will not be part of the bailout deal.

Cowen explained that the package would have two elements: a deep restructuring of the Irish banks and increased taxes and reduced spending in order to reduce Government borrowing by €15 billion ($20.5 billion) over the next four years.

“Providing assistance to Ireland is warranted to safeguard the financial stability in Europe,” EU economic and monetary affairs commissioner Olli Rehn said, adding that a team of European Commission, European Central Bank and IMF experts in Ireland would prepare the details of the assistance package by the end of the month.

“It is essential that we maintain economic continuity, that everyone understands that ATM machines function, that salaries are paid, that the big workforce that has built up here continues to be employed, that a large number of overseas investors continue to invest in enterprise,” Lenihan said.

Since Thursday, Ireland and international bodies were involved in intense negotiations regarding the bailout, while Britain and Sweden are reportedly prepared to extend loan offers to Ireland.

The EU welcomed Ireland’s request for financial assistance.

“The European Central Bank (ECB) concurs with the Commission, Ecofin Ministers and the Eurogroup that providing assistance to Ireland is warranted to safeguard financial stability in the European Union and in the euro area,” the EU said.

“We are confident that this program will contribute to ensuring the stability of the Irish banking system and permit it to perform its role in the functioning of the economy.”

Angry protesters gathered outside government buildings in Dublin as many Irish citizens believe that the conditions of a bailout snatches their sovereignty away with a high possibility of increased taxes. One injury was reported during the protest.

Ireland’s bailout comes only six months after the EU provided Greece with €110 billion ($151 billion).

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