Irish fury as multi-billion-euro bailout confirmed

Anger mounted in Ireland today after Prime Minister Brian Cowen confirmed the European Union had agreed to his request for a multi-billion-euro bailout.

Protesters gathered outside the government buildings in Dublin and the national media wrote of "a nation's outrage" following the leader's announcement.

The Irish cabinet's request for aid was approved by EU finance ministers during an emergency conference call late yesterday as officials moved to quell fears that the debt-laden nation could spread contagion to weak euro economies.

"EU and euro-area financial support will be provided under a strong policy programme which will be negotiated with the Irish authorities by the (European) Commission and the International Monetary Fund, in liaison with the ECB (European Central Bank)," Cowen said.

Finance Minister Brian Lenihan added at the press conference that it would take "several weeks" to finalise the exact amount of the bailout.

"We have not determined a precise figure," said Lenihan.

Diplomatic sources in Brussels put the figure at between 80 to 90 billion euros (110 to 123 billion dollars).

Cowen said the bailout "will address the budgetary challenges of the Irish economy in a decisive manner on the basis of the ambitious budgetary adjustment and comprehensive structural reforms" contained in a four-year budget plan.

"Given the underlying strengths of the Irish economy, decisive implementation of the programme should allow a return to a robust and sustainable growth, safeguarding the economic and social position of the people of Ireland," he said.

Cowen also said the contentious issue of Ireland's 12.5 percent corporation tax had "not arisen" in negotiations.

He added that a central plank of the rescue package would be the "further deep restructuring and the restoration of the long-term viability and financial health of the Irish banking system."

Anger spilt onto the streets of Dublin following the announcement and one protester was injured after accidentally being struck by a ministerial car.

The Irish Independent ran with the headline "a nation's outrage to drive Cowen out," adding that the public was "roundly furious at the manner in which the government has 'lied' about the unprecedented events of last week."

The broadsheet quoted a senior opposition Fine Gael member as saying: "The people are ready to march on government buildings, like I have never sensed before."

Monday's British newspaper The Times led with "humiliated Irish forced into 85-billion-euro bailout" on their front page.

In the past three years, Ireland's public finances have been ravaged by costly banking sector rescues, a property market meltdown and the global recession.

Irish Central Bank governor Patrick Honohan said the announcements "allow the course of economic and financial policy to be set on a more secure path."

"We can be reassured that the Irish banking system retains the support, not only of the Central Bank of Ireland, but of the European institutions," Honohan said.

Michael Noonan, finance spokesman for the main Fine Gael party, said there would be targets set down by the IMF and by Europe that the government will have to meet.

"So on the fiscal area they have lost an enormous amount of control," he told RTE.

Eurozone and EU finance ministers have agreed in principle to use a 750-billion-euro fund, the European Financial Stability Facility, which was set up in May after a 110-billion-euro EU-IMF bailout of Greece.

Ministers from the Group of Seven rich nations, adding the United States, Japan and Canada to euro giants France, Germany and Italy, plus Britain, were also holding discussions on the bailout, in a clear sign of global concern.

Ireland's four-year budget plan aims to make 15 billion euros of budget savings by 2014.

The project is a road-map to get Ireland's deficit down below the eurozone target of three percent of gross domestic product, and will involve a front-loading of six billion euros in public spending cuts and tax increases in the December 7 budget.