A rescue package aimed at bailing Ireland out of the financial mess it finds itself in has been given the go-ahead by European finance ministers.
The European Union and the International Monetary Fund is set to lend Ireland around £70 billion in order to help shore up the country's fragile finances.
Despite having financial problems of its own, the UK is expected to lend Ireland around £7 billion as part of the rescue.
As well as having EU-related obligations to help prop up its neighbour, close economic and banking ties means it is in the UK's interest to help the Irish out of its current malaise.
Having once been famed for its impressive economy, Ireland has suffered significantly in the face of the recession.
A downturn in the property market has also left the country's banks with significant liabilities on their books.
With fears growing that the banks might soon collapse, European ministers have been keen to avoid such a disaster and the consequent havoc this would wreak on the rest of the Eurozone.
"Given the strong fundamentals of the Irish economy, decisive implementation of the programme should allow a return to a robust and sustainable growth, safeguarding the economic and social cohesion," said a statement by European finance ministers.
"By building on the measures already taken by Ireland to address stress in its banking sector, a comprehensive range of measures - including deleveraging and restructuring of the banking sector - will contribute to ensuring that the banking system performs its role in the functioning of the economy."
The FTSE 100 climbed higher and the Euro strengthened following the announcement of the rescue deal.
Ireland's Deposit Guarantee Scheme and Eligible Guarantee Scheme will provide unlimited cover until the 31/12/2010 for all deposits and those fixed term deposits openend with participating Scheme members (Allied Irish Bank, Anglo Irish Bank Corporation LTD, Bank Of Ireland, Education BS, Irish Life & Permanent and Irish Nationwide BS) before 31/12/2010. From Jan 2011, cover reverts to 100% of the first 100,000 Euro's per depositor per institution.
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