News / Europe

EU Ministers Welcome Ireland Bailout Decision

Woman enters offices of Central Bank in Dublin, Ireland.
Woman enters offices of Central Bank in Dublin, Ireland.

European leaders have welcomed Ireland's request for a bailout package from the European Union and the International Monetary Fund. The Irish government applied for the bailout Sunday to help salvage its economy.

Spain's Foreign Affairs Minister Trinidad Jimenez said Monday that Ireland's decision to accept a bailout is good news. She said European Union solidarity has worked and the euro will be stable once again because of the help of all the countries within the European Union.

The Irish government had denied for weeks that it would need a rescue package to help salvage its economy. But after an emergency meeting Sunday night, the country's Taoiseach, or prime minister, said Ireland had requested financial help.

The total amount has yet to be agreed, but it's estimated to be worth around $100 billion - slightly less than a similar package loaned to Greece earlier this year.

Austrian Foreign Affairs Minister Michael Spindelegger said the bailout would stop contagion spreading to other weak economies within the euro zone.

"If you have a look at the euro and the stability of the euro of course this was the right way to proceed," Spindelegger said.

Ireland is mired in debt because the government had to bail out the country's main banks, a move that cost $60 billion and drove the 2010 deficit to 32 percent of GDP.

Sam Bowman of the  free market research group Adam Smith Institute, said the rescue package is a mistake.

"The problem is that the Irish banks borrowed recklessly and funded a property bubble that has now burst. And what we are doing in this bailout is paying off people who lent to the Irish banks to try to prevent them from making losses," Bowman said. "And what is going to happen is that the Irish taxpayer is going to have to pay back those debts. So really what we're doing is transferring the debt from the people who lent to the banks to the Irish tax payer and that's really not fair and it's really very bad for the Irish economy."

Measures to boost Irish government revenue will be part of the loan deal. One likely option is raising Ireland's corporate tax - Bowman said that would weaken the country's economy.

"[The] European Union is proposing that Ireland raises taxes, particularly corporation tax, which is the way Ireland has managed to grow over the last 20 years, is by attracting foreign investment, companies like Facebook, Google, Hewlett Packard, other drugs companies etcetera through a low corporation tax rate and forcing Ireland to raise its corporation tax rate is really going to mean that it's losing all chance of recovery and I think it's an extremely, extremely bad step," Bowman said.

The EU Commissioner for Economic and Monetary Affairs said Monday details of the loan agreement may not be finalized until the end of the month.

Related video report bu Mil Arcega:

You May Like

Computer Crash Halts US Visa, Passport Operation

Problems with database have resulted in extensive backlog of applications, affected State Department's consular offices all over the world More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

World Bank: Boko Haram Stalls African Aid Projects

Islamist group’s terrorism sets back agriculture, health efforts in Cameroon, Chad and Nigeria More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Israel Targets Gaza Supply Tunnelsi
X
July 24, 2014 4:42 AM
The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video MH17's 'Black Boxes' Could Reveal Crash Details

The government of Malaysia now has custody of the cockpit voice and flight data recorders from Malaysia Airlines Flight 17, which was hit by a missile over Ukraine before crashing last week. As VOA's Carolyn Presutti reports, the so-called black boxes may hold information about the final minutes of the flight.
Video

Video Living in the Shadows Panel Discussion

Following a screening of the new VOA documentary, "AIDS - Living in the Shadows," at the World AIDS conference in Melbourne, a panel discussed the film and how to combat the stigma associated with HIV/AIDS.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid