BRUSSELS (MNI) – The finance ministers of the Eurozone and of the
European Union as a whole Sunday welcomed the decision of Ireland to
formally request aid from the EU and the International Monetary Fund.

The request, they said, would help secure financial stability in
the EU and the Eurozone. Europe’s share of the aid will be financed by
two funds — the European Financial Stabilization Mechanism, which has
up to E60 billion available, and the newly-created E440 billion European
Financial Stability Facility. There could also be bilateral loans from
individual EU members, they said.

Though they mentioned no aid amount for Ireland, analysts and
various press reports have put the figure at between E80 and E100
billion.

The finance ministers’ verbatim text is below:

“Ministers welcome the request of the Irish Government for
financial assistance from the European Union and euro-area Member
States. Ministers concur with the Commission and the ECB that providing
assistance to Ireland is warranted to safeguard financial stability in
the EU and in the euro area.

In the context of a joint programme EU/IMF, the financial
assistance package to the Irish state should be financed from the
European financial stabilization mechanism (EFSM) and the European
financial stability facility (EFSF), possibly supplemented by bilateral
loans to be negotiated by EU Member States.

The United Kingdom and Sweden have already indicated today that
they stand ready to consider a bilateral loan. EU and euro-area
financial support will be provided under a strong policy programme which
will be negotiated with the Irish authorities by the Commission and the
IMF, in liaison with the ECB.

The programme will address the fiscal challenges of the Irish
economy in a decisive manner. It will build on the fiscal adjustment and
structural reforms that will be put forward by the Irish authorities in
their Four Year Budgetary Strategy next week. This strategy will provide
the details of the Government’s commitment to achieve fiscal
consolidation of E6 billion in 2011 as part of a strategy leading to a
3% of GDP deficit by 2014, implying an overall consolidation of E15
billion in the 4-year strategy, which contains an annual review.

Given the strong fundamentals of the Irish economy, decisive
implementation of the programme should allow a return to a robust and
sustainable growth, safeguarding the economic and social cohesion.

The programme will also include a fund for potential future capital
needs of the banking sector. By building on the measures already taken
by Ireland to address stress in its banking sector, a comprehensive
range of measures — including deleveraging and restructuring of the
banking sector — will contribute to ensuring that the banking system
performs its role in the functioning of the economy.

After approval by the Irish Government, the programme will be
endorsed by the ECOFIN Council and the Eurogroup, in line with national
procedures, on the basis of a Commission and ECB assessment.”

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