Ireland Accepts EU/IMF Bailout

Against its will, Ireland is now in a state of receivership mandated by the European Union (EU) and the International Monetary Fund (IMF) in an effort to resolve the Emerald Isle’s debt crisis.   European central bankers have paid £111 billion into Ireland’s banks to prevent damage to the euro in what is being jokingly referred to as the “Oliver Cromwell package.”  EU president Herman Van Rompuy described the action as a “survival crisis.”

Irish Prime Minister Brian Cowen will delay any decision on whether to proceed with national elections until the 2011 budget is passed and details of the international bailout package are negotiated.  “I’m saying that it is imperative for this country that the budget is passed,” Cowen said.  “I’m also saying that it is highly important in the interests of political stability that that happens.  It’s very important for people to understand that any further delay in this matter in fact weakens this country’s position.”

Cowen asked for significant “financial assistance” from the EU and the IMF and promised. spending cuts and tax increases.  This request came shortly after the prime minister said Ireland had “made no application for external support” for its debt-laden banks.  Dublin has spent billions trying to prop up its embattled banking sector.

Ireland is the second EU country, after Greece, to seek outside help to stabilize its finances.   That nation has been under strong pressure from its European neighbors – primarily Germany and France — to apply for a bailout, which they hope will calm investors and prevent a crisis of confidence in the euro.

“It is important that this state continues to fund itself in a stable way,” said Brian Lenihan, Ireland’s Finance Minister, “that economic continuity is preserved, that there is no danger to the borrowing which the state requires.”  Ireland’s low corporate tax rate – just 12.5 percent- — will not enter into the discussion because the country wants to attract large companies.