(November 29, 2010) — As part of the international finance rescue package, EU ministers said the Dublin government will be forced to seek assistance from its national pension fund as well as other cash reserves to produce €17.5 billion to bail out its banks and downtrodden economy.
The Irish government has said that as much as €10 billion from the National Pension Reserve Fund (NPRF) may be deployed as part of its bailout agreement.
Announcing details of the joint EU-International Monetary Fund (IMF) program, Irish Prime Minister Brian Cowen said it “represents the best available deal for Ireland” and provided “vital time and space” for the State to address its unprecedented economic problems, the Irish Times reported. Cowen added that the program of assistance for Ireland totaling €85 billion includes external assistance of €67.5 billion, comprising €45 billion from the European Union and bilateral loans from the UK, Sweden, Denmark, and €22.5 billion from the IMF. While a portion of the bailout money will be allotted to support for banks, the remaining assistance will be used to improve public finances, allowing the government to continue making welfare payments and pay other expenses, such as health and education.
Meanwhile, the UK is to contribute an estimated €7bn, some €3.8bn in a direct loan for the banks. According to The Guardian, Chancellor George Osborne said: “There is a loan going from Britain to Ireland of just over £3 billion. Of course, Britain is also part of the EU and part of the IMF, so we stand behind their loans as well. It is in Britain’s national interest. It is money we fully expect to get back, and we think it will help Ireland get on a fully stable path back to growth.” He also negotiated that the UK would be excluded from future eurozone bailout schemes after 2013.
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