22 Nov 2010

Ireland, EU agree to financial bailout package

9:03 pm on 22 November 2010

The Republic of Ireland and the European Union have agreed to a financial rescue package, the Irish Prime Minister has confirmed.

Brian Cowen said the amount and terms would be negotiated in the coming days with the EU and the International Monetary Fund, the BBC reports.

Irish Finance Minister Brian Lenihan has said the amount would be less than 100 billion euros.

Mr Cowen says the government will need to gather more taxes and spend less and it would be publishing a four-year budget plan that would restructure the banking industry.

EU Finance Commissioner Olli Rehn said the loans provided to Ireland over a three-year period.

Reuters news agency quoted senior EU sources as saying the loans would total 80 to 90 billion euros.

Ireland has been pressed by other European countries over the past week to ask for aid, the BBC reports.

The support will have two aims: to cover the deficit in the government's finances and to strengthen the country's financial industry.

The core of Ireland's crisis is a collapse in the property market and the losses it caused for the banks.

European Union officials and the Irish government are anxiously watching the reaction of European financial markets when they open.