The head of Ireland’s Central Bank, Patrick Honohan, has said that he expects Ireland to receive tens of billions of euros in loans from the EU and the IMF to prop up the country’s economy.
With a by-election looming, Irish Prime Minister Brian Cowen has been resisting a bailout, and rejecting suggestions that this would place the Irish economy under IMF supervision. But borrowing costs are spiralling, and other Eurozone members especially Portugal and Spain are keen to see the bailout, hoping that it might stabilize markets across the Eurozone.
Robert Halver, an analyst with Baader Bank AG, said: “There’s no alternative to this rescue package. The other States, the other governments of Germany or France and so on, are forced to help Ireland because Ireland could be the first step to a big crisis in Euroland and nobody is interested in this.”
Irish austerity measures include public spending cuts and tax rises, and more of the same is on the horizon. Talks on the EU/IMF bailout are on-going and an announcement is expected this afternoon.