Political disturbance in Ireland threatens bailout by Zuzana Zelenakova

Just recently, Irish Prime Minister announced that his country would receive a bailout from European Union and the International Monetary Fund. Ireland´s struggling financial system will be provided with about $140 billion. Experts from both EU and the IMF arrived in Dublin about a week ago to assess how big the financial aid package should be in order to prevent banks´ default. As EU officials stated the bailout “is warranted to safeguard financial stability in the EU and euro area.” Ireland will be required to follow strict rules and conditions if it wants to draw loans. "Loans are based on strict conditions. If Ireland does not stick to those condi! tions, there will be no more payments," said Juergen Stark, member of the Executive Board of the European Central Bank. He also expressed his personal opinion that ireland should raise its corporate taxes, which have been a subject of much criticism from other EU countries. "Ireland has further room to move in budget consolidation," Stark said. "In my opinion, it should keep the playing field level in taxation." However, new political development in Ireland could threaten the bailout. Prime Minister Brian Cowen is battling not only the opposition who demand an election before Christmas but also disturbances within his own party. Some members of his Fianna Fail party request that he quit as he lied to the country about secret bailout negotiations. About week ago Brian Cowen claimed that rumours about Ireland seeking a financial aid package were “ill-informed and inaccurate” only to admit few days later that the government had been negotiating with the EU because ! it is in dire need of bailout money to save debt-loaded banks.! However , at first a vote on the 2011-14 budget should be carried out successfully, scheduled to be held December 7, as it is essential in order to prevent "the financial bush fire concerning Ireland ... becomes a European-wide forest fire," as EU monetary and financial affairs commissioner Olli Rehn said.

related story (sgx18650): http://news.yahoo.com/s/ap/eu_ireland_financial_crisis;_ylt=...

by Zuzana Zelenakova for Cantell TV (http://cantell.tv)

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