Wednesday, November 24, 2010

EU/IMF Ireland package to total 85 bln euros -RTE

DUBLIN: The European Union and IMF bailout package for Ireland will total 85 billion euros ($114 billion) over three years to fund the government deficit and recapitalise banks, public broadcaster RTE said on Tuesday, Nov 23.

The Irish Finance Ministry dismissed the report as premature and said the package was still under negotiation.

RTE's figure, which would amount to roughly 20,000 euros per Irish citizen, is in line with figures estimated by economists, although some have said that even more could be needed to keep the country afloat.

RTE said the package from the EU and the International Monetary Fund would provide 48 billion euros to help fund the Irish government's deficit over the next three years and 15-20 billion to recapitalise its banks, with a contingency fund of 20 billion euros for the banks.

"The package would see the level of capital in the Irish banks being increased from eight to 12 percent in a move to bolster confidence of depositors in the financial system," RTE said. The broadcaster did not say how it had obtained the information.

Such a deal would see the Irish government increase its stake in banks that received the funding. The Financial Times said the government would end up with a majority stake in Bank of Ireland. (BKIR.I)

"I see there's all sorts of speculation. It's just speculation," a Finance Ministry spokesman said.

"The technical teams are still trying to work out what the package will be," he added. "We are expecting these discussions will take a couple of weeks. They only started on Monday."

Ireland agreed to the bailout on Sunday after heavy selling of Ireland's bonds pushed up yields on its debt. - Reuters

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