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EU begins Irish Republic bail-out talks EU begins Irish Republic bail-out talks
(about 1 hour later)
European finance ministers are meeting in Brussels, with the issue of a possible bail-out of the Irish Republic still top of the agenda.European finance ministers are meeting in Brussels, with the issue of a possible bail-out of the Irish Republic still top of the agenda.
EU finance commissioner Ollie Rehn said on Tuesday plans were being made for a potential rescue programme, should the Irish government ask for help.EU finance commissioner Ollie Rehn said on Tuesday plans were being made for a potential rescue programme, should the Irish government ask for help.
As he arrived for the meeting, Mr Rehn said the EU was engaged in "effective" consultation with the Irish government.As he arrived for the meeting, Mr Rehn said the EU was engaged in "effective" consultation with the Irish government.
British Chancellor George Osborne said the UK was "ready to support Ireland".British Chancellor George Osborne said the UK was "ready to support Ireland".
"We're going to do what is in Britain's national interest," he said, ahead of the meeting of the Economic and Financial Affairs Council (Ecofin).
"Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system."
There have been reports that the UK is considering offering billions of pounds of direct loans to the Irish Republic.There have been reports that the UK is considering offering billions of pounds of direct loans to the Irish Republic.
When asked about this, Mr Rehn said: "That is under discussion and it is natural because the United Kingdom and UK banks have a very significant exposure in Ireland. At the same time, concerns have been raised about the eurozone's bail-out of Greece after Austria said Greece had not fulfilled its obligations under the EU-backed aid package. Austria has yet to submit its December contribution to the bail-out.
This followed the release of figures on Monday showing that Greece's budget deficit was worse than previously thought.
'Strong interconnection'
When asked if the UK should assist the Irish Republic, Mr Rehn said: "That is under discussion and it is natural because the United Kingdom and UK banks have a very significant exposure in Ireland.
"There is a very strong interconnection in the banking sector and the financial system between the two countries.""There is a very strong interconnection in the banking sector and the financial system between the two countries."
Mr Osborne said: "We're going to do what is in Britain's national interest.
"Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system," he said, ahead of the meeting of the Economic and Financial Affairs Council (Ecofin).
'Accent on banking''Accent on banking'
Tuesday's meeting of eurozone ministers and financial institutions in Brussels came against a background of renewed financial market turmoil.Tuesday's meeting of eurozone ministers and financial institutions in Brussels came against a background of renewed financial market turmoil.
At the centre of this has been the markets' fear that the governments of the weaker eurozone countries - particularly the Irish Republic - cannot afford to repay their huge debts.At the centre of this has been the markets' fear that the governments of the weaker eurozone countries - particularly the Irish Republic - cannot afford to repay their huge debts.
Mr Rehn said that "the Irish authorities are committed to working" with the EU, the European Central Bank and the International Monetary Fund to calm market turmoil.Mr Rehn said that "the Irish authorities are committed to working" with the EU, the European Central Bank and the International Monetary Fund to calm market turmoil.
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He told reporters that potential rescue plans would have an "accent on restructuring its banking sector".He told reporters that potential rescue plans would have an "accent on restructuring its banking sector".
A statement issued after the meeting praised the Republic of Ireland's efforts to combat its problems: "The Eurogroup welcomes the significant efforts of Ireland to deal with the challenges it faces in the budgetary, competitiveness and financial sector areas."A statement issued after the meeting praised the Republic of Ireland's efforts to combat its problems: "The Eurogroup welcomes the significant efforts of Ireland to deal with the challenges it faces in the budgetary, competitiveness and financial sector areas."
The statement said the Irish government would engage in a "short and focused consultation" with the Commission, the ECB and the IMF in order to determine the best way to provide any necessary support.The statement said the Irish government would engage in a "short and focused consultation" with the Commission, the ECB and the IMF in order to determine the best way to provide any necessary support.
It concluded by adding "We confirm that we will take determined and co-ordinated action to safeguard the financial stability of the euro area, if needed, and that we have the means available to do so".It concluded by adding "We confirm that we will take determined and co-ordinated action to safeguard the financial stability of the euro area, if needed, and that we have the means available to do so".
The IMF welcomed the Republic of Ireland's decision to allow a "short and focused consultation" to decide if the country needs a budget bailout.The IMF welcomed the Republic of Ireland's decision to allow a "short and focused consultation" to decide if the country needs a budget bailout.
Mr Rehn called the Irish Republic the most pressing challenge of today, adding that there was "an intensification of preparations of a potential programme in case it is requested" but the meeting proposed no concrete course of action.Mr Rehn called the Irish Republic the most pressing challenge of today, adding that there was "an intensification of preparations of a potential programme in case it is requested" but the meeting proposed no concrete course of action.
'No support''No support'
The Irish government has repeatedly denied that it is seeking outside support.The Irish government has repeatedly denied that it is seeking outside support.
On Tuesday, Prime Minister Brian Cowen told parliament that he had not asked for bail-out money and that the Irish economy was well funded until next year.On Tuesday, Prime Minister Brian Cowen told parliament that he had not asked for bail-out money and that the Irish economy was well funded until next year.
He said his country was working with European partners to deal with the debt issue, but that his country was neither "immune or unique" amid the recent economic crisis.He said his country was working with European partners to deal with the debt issue, but that his country was neither "immune or unique" amid the recent economic crisis.
Irish finance minister Brian Lenihan said European authorities had welcomed the steps taken to date by the Irish government.Irish finance minister Brian Lenihan said European authorities had welcomed the steps taken to date by the Irish government.
"What they are saying and what we are saying, what all the finance ministers are saying, is that we have to work together to resolve these market difficulties," he said."What they are saying and what we are saying, what all the finance ministers are saying, is that we have to work together to resolve these market difficulties," he said.
Earlier, Mr Rehn warned that Europe must "resist alarmism" amid the latest fears over Irish debts.Earlier, Mr Rehn warned that Europe must "resist alarmism" amid the latest fears over Irish debts.
Mr Rehn, speaking after the talks had finished, said the EU would, however, step up work on support for the Republic "with an accent" on its banks.Mr Rehn, speaking after the talks had finished, said the EU would, however, step up work on support for the Republic "with an accent" on its banks.
Meanwhile, concerns were raised about the eurozone's bail-out of Greece after Austria said Greece had not fulfilled its obligations under the EU-backed aid package. Austria has yet to submit its December contribution to the package.
This followed the release of figures on Monday showing that Greece's budget deficit was worse than previously thought.
Are you in the Republic of Ireland? What is your reaction to the latest developments? Do you think a bail out is necessary? Send us your comments using the form below.Are you in the Republic of Ireland? What is your reaction to the latest developments? Do you think a bail out is necessary? Send us your comments using the form below.