Ireland has finally been forced to take an economic bail-out from the European Union in a bid to save the euro and stabilise the country’s money problems.
The Dublin government have spent the last week in denial that any help was needed, but have now made a humiliating turn-around. The government have had to succumb to pressure from other euro zone countries to take the loan.
Emergency telephone conference talks between G7 and euro zone finance ministers including George Osborne, the Chancellor were help in order to discuss a combined EU-IMF rescue package of up to £77billion.
The move means that British taxpayers now face paying a bill of at least £7billion and possibly £9billion, as under a deal signed by the last Labour government, British taxpayers are liable to share in the cost of any EU bail-out.
Figures have shown that this represents upwards of £300 for every family in the UK.
However, the bail-out may not be the end of Ireland’s money worries. Last April, Greece received a £94 billion bail-out and officials have warned that the EU’s debt crisis is not finished yet.
Portugal has already warned that there is a “high risk” it might need economic help. If investors are unconvinced by the Irish rescue package, the euro could come under pressure while the cost of borrowing for the Dublin government could rise.
Brian Cowen, the Irish prime minister, called on the Irish people to have faith that the country will return to prosperity.
David Cameron pledged to help Ireland as a close “neighbour and friend” but refused to discuss how much aid Britain would be prepared to contribute, or whether the bulk of it would come via a Anglo-Irish agreement or a wider EU deal.
”Our banking systems are linked, our finances and economies are very linked so of course we stand ready to help but I don’t want to speculate about another country’s financial situation,” said the Prime Minister.
”The fact is that we are interconnected and if help is required Britain stands ready to help.”
Ireland’s cabinet held emergency talks on Sunday afternoon to finalise the loan request and to sign off an austerity plan for 2011 to 2015 which had been checked by EU and IMF officials over the weekend.
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