European finance ministers were meeting in Brussels over
the weekend to finalise the details of a bail-out worth more than 85bn euros
($113bn) for the Irish Republic.
Eurozone
ministers were also joined by those from outside, including UK Chancellor
George Osborne, who said it was “in the whole of Europe’s interests to
bring this matter to a close”.
French Finance
Minister Christine Lagarde said a deal was “nearly done”.
The interest rate
the Irish will have to pay on the loan is yet to be agreed.
The BBC’s Joe
Lynam said that just under half of the 85bn euros would be used to prop up the
Irish banking system, with the remainder to help the government fund day-to-day
spending.
The talks between
the 16 eurozone members and the three countries who have offered direct
bilateral loans to the Irish Republic – the UK, Sweden and Denmark – will be
followed by another meeting of finance ministers from all 27 EU countries.
On Saturday, thousands
of people demonstrated in Dublin against the IMF and EU bail-out, and against
the government’s austerity budget.
The budget,
announced last week, aims to resolve the country’s debt crisis via tax rises
and spending cuts.
As ministers
gathered in Brussels on Sunday, Irish Finance Minister Brian Lenihan was
delayed due to heavy snowfall in Dublin.
Speaking to the
media as they arrived, several ministers were optimistic that the rescue
package would be agreed.
“We’re going
to discuss the details of the whole package today and I think we’re going to
make good progress,” said the UK’s Mr Osborne, reiterating that it was in
Britain’s national interest to help Ireland.
“The
assistance to Ireland is nearly done,” said France’s Ms Lagarde. “We
have just a little fine-tuning to be done, notably on interest rates.”
German Finance
Minister Wolfgang Schaeuble said: “We are working towards a solution and
hope that as of tomorrow the financial markets will be confident again that the
euro is a currency with a stable future.”
The EU and the
IMF have agreed to the financial bail-out, but the ministers want to reach an
outline agreement before the financial markets reopen on Monday.
Ministers have
said that negotiations about the interest rate for any loans were still ongoing,
despite Irish state broadcaster RTE reporting that the rate to be paid on part
of the loan could be as much as 6.7 per cent, higher than the rate charged to
Greece for its bail-out, which has raised concerns from opposition parties.
The austerity package,
announced on Wednesday by Prime Minister Brian Cowen, includes proposals to cut
the minimum wage, slash the number of public sector jobs and increase taxes in
order to save 15bn euros over the next four years.
It still has to
go before the Dail (Parliament) before it can be passed – which is not
guaranteed given the government’s small majority.
On Saturday, the
protesters marched to Dublin’s General Post Office, the site of the nationalist
uprising against British rule in 1916, to vent their anger.
Organisers said
more than 100,000 people took part in Saturday’s protest, while the Irish
police (Gardai) estimated that “in the region of 50,000” were
involved.
A spokesman for
the Irish Congress of Trade Unions president, Macdara Doyle, told the BBC that
the protest was designed to send out a clear message: “We’re trying to
convince government and show government that there’s no support for their plan
amongst civic society and that every measure they have taken to date has been
exactly the opposite of what they need to do.
“Our fears about the new budget is that it’s
deflationary multiplied by ten. It’s taking far too much money out of the
economy, and whatever possible chance there is of some sort of growth taking
hold in the economy will be killed by this proposed budget.”
Joan Burton,
finance spokeswoman for the Labour Party said the government had to secure a
fair deal for Irish taxpayers at the Brussels meeting.
“From day
one of this crisis, the government has prioritised the interests of the banks and
their investors over the interests of ordinary people. This has to
change,” she said.
Sinn Fein Dail
leader Caoimhghin O Caolain called on the government to end the talks and
added: “No such deal to place the state in economic bondage can be binding
on a future government and should not be honoured.”
But Mr Cowen’s
government has insisted the austerity plan and next month’s budget are crucial
steps to show fellow members of the 16-nation eurozone that the Irish Republic
is putting its finances in order.
The bail-out
money is expected to come from a number of different sources, with the IMF loan
expected to be the cheapest money but European money likely to more expensive,
particularly the money from the European Stability Facility.
The UK has
offered the Irish Republic a direct bilateral loan on top of its contribution
to the international funds under discussion.
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im not sure how more job losses,a decrease in wages and higher taxes are going to help this is one more blunder in a long line of blunders for prime minister cowen it has been estimated that there will be another ninty thousand job losses in the next twelve months,brian cowen knows his number is up as there is to be a general election in the new year not before brian cowen and his yes men go on their christmas holidays in a few weeks for a month or so the green party want out now they are only riding his coat tails,now portugal is adamant that they do not need a bail out from the ecb,imf and the eu however that remains to be seen -william morey cobh(cove) ireland