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EU ministers rubber stamp Ireland bail-out

EU ministers rubber stamp Ireland bail-out

Category: Economy

Updated: 29/11/2010
First Published: 29/11/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

European Ministers have given the seal of approval to a £72 billion rescue package for the Irish Republic.

The deal includes loans amounting to £42.5 billion to bolster the Irish Government's finances and £8.5 billion to improve liquidity in its banking system.

Another £21.2 billion has been put aside in the case the banking system requires further help in the future.

While around £15 billion of the bail-out is being funded by the Irish Government and £19 billion is being contributed by the International Monetary Fund (IMF), the majority of the money will come from the member states of the European Union (EU).

Despite having financial problems of its own, the UK's total contribution will amount to £5.9 billion.

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 country's 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.

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