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Ireland will take bail-out and restructure banks

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Ireland will take bail-out and restructure banks

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After weeks of speculation, it has been confirmed that Ireland will definitely be receiving a bail-out package.

On Sunday, Finance Minister Brian Lenihan said formal negotiations would soon begin between the country, the EU and the IMF. He also defended the government, which is being pressured to resign.

Later in the day, Prime Minister Brian Cowen stated that loans could also be sought from individual countries like Britain and Sweden. “The second key element of the agreement will be a programme to reduce our budget deficit. Put simply, the government has to increase our taxes and reduce our spending to levels we can afford. In order to help Ireland complete these essential tasks, and to safeguard the stability of the euro area, we will receive funding which we will repay over time,” said Cowen.

Cowen also announced that the government would be publishing a four year plan to restructure the banks and make them smaller.

It is believed the financial package could be between 45 and 90 billion euros, depending on whether additional funds are needed to manage public debt.