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

Polls Open in Scotland Independence Vote

As race to persuade undecided voters continues, 'No' voters say they believe life in Scotland will slowly improve, 'Yes' vote not worth the risk More

China-India Border Standoff Continues as Leaders Hold Summit

New Delhi accuses hundreds of Chinese soldiers of illegally entering Indian territory in disputed region of Ladakh More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country 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.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid