Correspondent's Choice

This story about a financial bailout for Ireland was published by EurActiv on 22nd November 2010.

European Union finance ministers yesterday (21 November) agreed a request from Ireland to help it deal with its crippling debt problem. The plan, to be finalised this week, is estimated to be worth 80-90 billion euros and will be subject to strict conditionality, including a four-year austerity budget.

After days of hesitation, Ireland finally submitted a formal request for financial assistance on Sunday (21 November).

“The European authorities have agreed to our request,” Prime Minister Brian Cowen said. “I expect that agreement to be finalised shortly, within the next few weeks.”

EU finance ministers held a conference call at around 18:00 Brussels time in which they agreed on the Irish demand, in order “to safeguard financial stability in the EU and in the euro area”.

The package is aimed at stopping market concerns about Ireland’s debt from spreading to other countries with big budget gaps such as Spain and Portugal.

“The financial assistance package to the Irish state should be financed from the European Financial Stabilisation Mechanism (EFSM) and the European Financial Stability Facility (EFSF), possibly supplemented by bilateral loans to be negotiated by EU member states,” according to a statement from the Eurogroup and the Ecofin ministers, published at around 20:00.

The ministers added that the United Kingdom and Sweden have already indicated that they stand ready to provide a bilateral loan, with Britain saying it would offer about seven billion pounds (8.15 billion euros) in bilateral aid.

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