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November 14, 2010    

Talks of Irish bailout denied

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by Kay Murchie
Talks of Irish bailout denied

Ireland’s Government continues to reject claims that it is seeking emergency financial support via the EU rescue fund - established by European Governments and the International Monetary Fund after the Greek debt crisis earlier this year.

There have been reports over the weekend that Irish officials have already held discussions with the European Financial Stability Fund with regard to a bailout of between €60bn (£51 billion) and €80 billion.

However, the claims have been denied and many have said that the Irish Government is fully funded until at least the middle of next year – meaning a liquidity crisis is not going to happen anytime soon.

The European Commission has declined to comment on the matter.

There have been concerns after Irish borrowing costs surged to record highs. However, experts argue that if borrowing costs do not stabilise soon, Ireland will be forced to seek a rescue.

The former “Celtic Tiger” economy experienced a property boom in the late 1990s, with multinationals arriving to take advantage of one of the lowest corporate tax rates in the euro zone.

However, it has suffered the worst property slump of all developed economies, with property prices falling by more than 50%, in some cases.

It suffered one of the deepest recessions of its fellow euro zone nations and is also battling to bring its deficit down from 12% of economic output to 3% by 2014.

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