Irish Finance Minister Brian Lenihan said he would recommend that the government apply for a bailout from the European Union and the International Monetary Fund when the cabinet meets on Sunday to discuss the country's sprawling budget deficit.
AFP - Irish Finance Minister Brian Lenihan said he would recommend to a cabinet meeting Sunday that the government should apply for a financial bailout programme from the EU and the IMF.
Ireland's cabinet was to hold an emergency meeting to finalise a four-year deficit crisis plan seen as key to winning the international bailout and easing fears about the future of the euro.
"There will be a meeting of the government this afternoon. I will proposing to my colleagues that we should formally apply for a programme," Lenihan told RTE state radio.
He did not specify the size of the bailout, but agreed it would run to tens of billions of euros.
"Certainly, it will not be a three-figure sum," he added.
Media reports suggested the bailout package was thought to be worth between 40 and 100 billion euros.
Irish officials have been holding a fourth day of tense talks with the European Union, the European Central Bank and the International Monetary Fund on financial assistance.
"Obviously, the government will have to look at the various considerations involved but as the responsible minister I believe it is important that this state continues to fund itself in a stable way," Lenihan said.
I think it's very important to recognise the situation as it is. What the government is engaged in is discussions with colleagues and European Union institutions about seeing ... what will be the shape of the package for Ireland. We want to make sure that that's the best possible one for Ireland.
Taoiseach of Ireland, Brian Cowen
"That economic continuity is preserved. That there is no danger to the borrowing which the state requires to make in its own interest and also, and above all -- and the issue that has been highlighted this week -- that our banking sector is stabilised.
"So, for all these reasons I will be recommending to the government that we should apply to a programme and open formal negotiations."
Lenihan said market conditions had been very difficult since late August.
He said that since a visit to Dublin of EU Economic Commissioner Ollie Rehn a fortnight ago "market conditions had impacted on the banking sector in particular".
"There was considerable concern both on our part and on the part of the Europeans about this issue."
Lenihan said the government had decided last Tuesday, before the eurozone ministers' meeting in Brussels, "to open this process of intensive discussion about the issues".
"It was important from a political point of view, from a national point of view that we safeguard the issues of the state and the taxpayer at all stages in this process."
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.
THE DEBATE: IRELAND UNDER THE EUROZONE SPOTLIGHT
Date created : 2010-11-21