EU unanimously approves Irish bailout

Economic and Financial Affairs ministers unanimously agreed on 29 November to grant financial assistance in response to the Irish authorities' request on 22 November 2010. Ministers concur with the Commission and the ECB that providing a loan to Ireland is warranted to safeguard financial stability in the Euro area and the EU as a whole.

Euro-area and EU financial support agreed by Ecofin ministers in response to Irish request for support made on 22 November will be provided on the basis of a programme which has been negotiated with the Irish authorities by the Commission and the International Monetary Fund (IMF), in liaison with the European Central Bank (ECB). This programme was also agreed by Irish authorities on 28 November.

Main elements of Irish Recovery Plan

  • An immediate strengthening and comprehensive overhaul of the banking system
  • An ambitious fiscal adjustment to restore fiscal sustainability, including through the correction of the excessive deficit by 2015
  • Growth enhancing reforms, in particular on the labour market, to allow a return to a robust and sustainable growth, safeguarding the economic and social position of its citizens

The financial package of the programme will cover financing needs up to 85 billion Euro, including 10 billion Euro for immediate recapitalisation measures, 25 billion Euro on a contingency basis for banking system supports and 50 billion Euro covering budget financing needs.

Half of the banking support measures (171⁄2 billion Euro) will be financed by an Irish contribution through the Treasury cash buffer and investments of the National Pension Reserve Fund. The remainder of the overall package should be shared equally amongst: the European Financial  Stabilisation Mechanism (EFSM), the European Financial Stability Facility (EFSF) together with bilateral loans from the UK, Denmark and Sweden, and the IMF (221⁄2 billion Euro each).