The EU council of ministers of economy and finances from 27 countries
and the Euro Group (16 EU countries using euro) have approved the plan
to provide financial aid to Ireland worth 85 billion euro, RIA Novosti
reports, citing the president of the Euro Group Jean-Claude Juncker.
Juncker noted that it will be a joint three-year plan of support from
EU and IMF.
10 billion euro of the summit will be spent on immediate
recapitalization, 25 billion -- on support of the bank system, 50
billion euro -- on cover of financial needs of the budget.
25 billion euro will be used as reserve funds. Ireland will provide
17.5 billion euro to support the bank system.
The European Union will provide Ireland with 45 billion euro. The
money will be issued using the European Financial Support Mechanism
(EFSM) and the European Financial Stability Fund (EFSF). EFSM will pay
22.5 billion euro, EFSF -- 17.7 billion euro.
Bilateral credits will be provided by UK (approximately 3.8 billion
euro), Denmark (approximately 400 million euro) and Sweden
(approximately 600 million euro).
IMF will provide 22.5 billion euro, Juncker said.
The government officials of Ireland, mission of the European experts
and the IMF agreed on the plan on Sunday, France Press reports, citing
a diplomatic source in Brussels.
The loan rate will be determined next week.
Media reports, citing the Irish government, that the average annual
credit rate will be 5.80%. Income of the Irish state bonds reached a
record of 9.19% on Friday.
Ireland requested the EU and IMF last weekends to provide financial
support to the bank system. The country presented a plan to reduce the
budget deficit by $20 billion in four years.
Expenses are planned to be reduced by $13.3 billion, additional tax
income will reach $6.7 billion. Realization of the program will allow
Ireland to achieve a 3% GDP in 2014. This year Ireland may reach a
record budget deficit of 32% GDP.
EU gave Ireland an additional year (until 2015) to reduce the budget
deficit to a maximum of 3% GDP.
