Ireland says bailout talks complete, EU to OK deal

By Shawn Pogatchnik

Associated Press

Published: Sunday, Nov. 28 2010 7:15 a.m. MST

BRUSSELS — Debt-crippled Ireland has completed negotiations for an EU-IMF bailout and a deal will be ratified and published by fellow European governments within hours, Prime Minister Brian Cowen said Sunday.

Cowen said in a statement that Dublin talks which began Nov. 18 with International Monetary Fund, European Commission and European Central Bank experts "are concluding today" in Brussels. He says the Irish Cabinet met late Saturday to approve the plans.

"It is expected that the program for assistance to Ireland will be adopted at this ministerial meeting. It is anticipated on that basis that details of the agreement will be published later this afternoon," Cowen said in a statement issued in Dublin.

European Union nations gathered to sign off on the proposed €85 billion ($113 billion) emergency loan for Ireland.

As they entered the hastily arranged meeting, ministers stressed their hope that the aid package to Ireland would help to remove bailout pressure from fellow eurozone members Portugal and Spain.

"Today we will conclude about Ireland and we will organize the best solution for the eurozone," Belgian Finance Minister Didier Reynders said.

The finance ministers were poring over a series of documents spelling out proposed terms and conditions for loans from across the globe, but chiefly from Ireland's European partners.

With the euro weakening and the yields on Portuguese and Spanish bonds surging in recent weeks, finance ministers also were aiming to stabilize the wider 16-nation eurozone.

"It's not only about aid for Ireland, but together with Ireland about the stability of the common currency," said Austrian Finance Minister Josef Proell.

Britain's treasury chief, George Osborne, said his country could provide both a bilateral and an EU-organized loan to Ireland, and the EU's 27 financial chiefs wanted to sign off on "the details of the whole package."

"Obviously we've all come here on a Sunday in order to get some stability. It's absolutely in Britain's national interest that we sort out Ireland," George Osborne told reporters before entering the Brussels conference.

When asked about the total amount of a proposed bilateral loan and Britain's contribution to a wider bailout fund, Osborne said, "That's precisely what we're going to discuss today, the details of the Irish package."

The European Central Bank forced Ireland into accepting a bailout this month as it became clear that several state-backed banks in Dublin were struggling to raise funds and were instead relying on €130 billion in short-term loans supplied or approved by the Frankfurt bank.

Sunday's conference was preceded by a flurry of telephone conversations involving senior EU officials, including EU President Herman Van Rompuy, president of the European Central Bank Jean-Claude Trichet, Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France.

French Finance Minister Christine Lagarde said she thought the deal for Ireland was almost complete, but discussions remained about the regimes of interest rates that the Irish would be expected to pay on different tiers of the loan package.

Irish officials have disputed reports that at least part of the bailout would come with an interest rate of 6.7 percent. They have said it will be nearer the 5.2 percent average being paid by Greece for its €110 billion ($150 billion) EU-IMF bailout in May.

Ministers were under pressure to sign off an a deal before markets open Monday. In the mix were bilateral loan offers from Britain, Sweden and Denmark, which are not members of the euro currency but have major business interests in Ireland.

Irish Finance Minister Brian Lenihan arrived late at Sunday's meeting because of heavy snows in Dublin and entered without speaking to reporters.

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