As a group of international experts arrived in Dublin on Thursday, the Irish government finally seemed to admit that it was unable to cope with its massive banking crisis alone. Whether the talks result in a bailout from the EU-IMF rescue fund remains to be seen. But the Irish insist they are holding onto their low corporate tax.
Is a bailout by any other name still a bailout? The Irish government may have finally admitted that it requires help with its ailing banking sector but ministers are continuing to deny that the arrival of international financial experts to Dublin this week heralded any loss of national sovereignty. The mood in the country is now one of disbelief that Ireland, once the famed Celtic Tiger economic powerhouse, could have sunk so low, so quickly. And that it could be on the cusp of handing over some control of its governance to outsiders.
On Friday, members of the troika from the International Monetary Fund, the European Union and the European Central Bank, who held an initial round of talks on Thursday, began pouring over the books to get a sense of just what kind of assistance Ireland requires. The question now seems to be if a contingency fund for its banking sector will suffice or if the Irish state will have to apply for support from the European Financial Stability Facility, the fund financed by the EU and the IMF, which was created in response to the Greek debt crisis. Also at stake is whether Ireland will have to cede its low corporate tax rate, something that has long irked its European partners, before it can obtain any aid.
After a week of denials by government figures, by Thursday night Irish Finance Minister Brian Lenihan was admitting that the Irish government was no longer in a position to deal with the massive debts incurred by the country’s financial institutions that seemed to be sucking the rest of Ireland’s finances into a black hole. Continue reading
The Irish government insists it does not require a bailout, even as a team of EU and IMF experts heads to Dublin for talks. Yet aid could also come from another quarter, in the form of Ireland’s neighbor Britain. Meanwhile, the German press is divided on whether Berlin shares some of the blame for Ireland’s woes.
On Tuesday, embattled Irish Finance Minister Brian Lenihan fended off pressure from other euro-zone member states to seek a bailout package from the stability fund established by the European Union and the International Monetary Fund earlier this year. Yet Dublin may not be able to hold out for much longer.
The imminent arrival of IMF and EU experts in Dublin for what are being described as “short and focused discussions” starting on Thursday could see Ireland eventually tap into the fund, though on Tuesday night, following a meeting of euro-zone foreign ministers in Brussels, Lenihan was still insisting that such a bailout was “not inevitable.”
Speaking to public broadcaster RTE on Wednesday morning, Lenihan said Ireland would accept EU support if the banking crisis was too big for the country to fix on its own. “Ireland is a small country and if the banking problems in the country are too big for this small country to manage, Europe is making it clear that they will help and help in every possible way to secure the system,” Lenihan said. Continue reading