Monday, November 29, 2010

Euro-socialism Under Stress - Ireland Takes $89 Billion From The EU

EU agrees on $89 billion bailout loan for Ireland

If the government supported lifestyle has shown to be unsustainable why protest the austerity cuts?

For those who long for the day where capitalism will fall - tell me - Where did the money for the bailout come from?  The gold vault which communism had filled up?



European Union nations agreed to give euro67.5 billion ($89.4 billion) in bailout loans to Ireland on Sunday to help it weather the cost of its massive banking crisis, and sketched out new rules for future emergencies in an effort to restore faith in the euro currency.

The rescue deal, approved by finance ministers at an emergency meeting in Brussels, means two of the eurozone's 16 nations have now come to depend on foreign help and underscores Europe's struggle to contain its spreading debt crisis. The fear is that with Greece and now Ireland shored up, speculative traders will target the bloc's other weak fiscal links, particularly Portugal.

In Dublin, Irish Prime Minister Brian Cowen said his country will take euro10 billion immediately to boost the capital reserves of its state-backed banks, whose bad loans were picked up by the Irish government but have become too much to handle. Another euro25 billion will remain in reserve, earmarked for the banks.

The rest of the loans will be used to cover Ireland's deficits for the coming four years. EU chiefs also gave Ireland an extra year, until 2015, to reduce its annual deficits to 3 percent of GDP, the eurozone limit. The deficit now stands at a modern European record of 32 percent because of the runaway costs of its bank-bailout program.

Cowen said the accord — reached after two weeks of tense negotiations in Brussels and Dublin to fathom the true depth of the country's cash crisis — "provides Ireland with vital time and space to successfully and conclusively address the unprecedented problems that we've been dealing with since this global economic crisis began."

However, in a surprise accounting move, European and IMF experts decided that Ireland first must run down its own cash stockpile and deploy its previously off-limits pension reserves in the bailout. Until now Irish and EU law had made it illegal for Ireland to use its pension fund to cover current expenditures. This move means Ireland will contribute euro17.5 billion to its own salvation.

1 comment:

Blogger said...

With BullionVault you can obtain physical bullion bars at current spot prices.

Register your free account today and get 4 g's in free silver as a joining bonus.