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| Version 11 | Version 12 |
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| Eurozone collapse 'inconceivable' | Eurozone collapse 'inconceivable' |
| (40 minutes later) | |
| The head of the European Union's main bail-out fund has dismissed the possibility of a break up of the 16-nation eurozone. | |
| Klaus Regling of the European Financial Stability Facility (EFSF) said it was "inconceivable that the euro fails". | |
| There has been speculation that some countries may be forced to give up the euro in light of the Irish debt crisis. | There has been speculation that some countries may be forced to give up the euro in light of the Irish debt crisis. |
| The currency has fallen by more than three cents against the dollar this week because of events in the Republic. | The currency has fallen by more than three cents against the dollar this week because of events in the Republic. |
| Market doubts | Market doubts |
| The single currency rallied back slightly in Thursday afternoon trading to $1.3375, but has still lost 3.4 cents or 2.5% of its value against the dollar since the beginning of the week. | The single currency rallied back slightly in Thursday afternoon trading to $1.3375, but has still lost 3.4 cents or 2.5% of its value against the dollar since the beginning of the week. |
| Against the pound, the euro is down 1.2% since Monday at 84.8p. | Against the pound, the euro is down 1.2% since Monday at 84.8p. |
| Meanwhile, the bond yields of debt-troubled eurozone governments have continued to rise, suggesting that markets are becoming ever less comfortable about lending them money. | Meanwhile, the bond yields of debt-troubled eurozone governments have continued to rise, suggesting that markets are becoming ever less comfortable about lending them money. |
| The 10-year Irish bond yield rose to 9.08% - above the highs seen prior to the start of the bailout talks. Spanish bonds also fell in value, raising the 10-year yield to 5.2%. | The 10-year Irish bond yield rose to 9.08% - above the highs seen prior to the start of the bailout talks. Spanish bonds also fell in value, raising the 10-year yield to 5.2%. |
| In or out? | In or out? |
| Mr Regling told Germany's Bild newspaper there was "zero chance" that the euro would collapse. | Mr Regling told Germany's Bild newspaper there was "zero chance" that the euro would collapse. |
| "No country will voluntarily give up the euro - for weaker countries that would be economic suicide, likewise for stronger countries," he said. | "No country will voluntarily give up the euro - for weaker countries that would be economic suicide, likewise for stronger countries," he said. |
| Germany's Chancellor, Angela Merkel, also chimed in, saying that she is "more confident than this spring that the European Union will emerge strengthened from the current challenges". | Germany's Chancellor, Angela Merkel, also chimed in, saying that she is "more confident than this spring that the European Union will emerge strengthened from the current challenges". |
| It follows more negative comments she made earlier in the week, when she described the euro's plight as "exceptionally serious". | It follows more negative comments she made earlier in the week, when she described the euro's plight as "exceptionally serious". |
| Questions have been raised about the cost to the EU, and the International Monetary Fund, of bailing out eurozone members - over the summer, Greece was bailed out to the tune of 110bn euros ($147bn; £93bn), while the Irish Republic is currently negotiating what is expected to be an 85bn-euro rescue package. | Questions have been raised about the cost to the EU, and the International Monetary Fund, of bailing out eurozone members - over the summer, Greece was bailed out to the tune of 110bn euros ($147bn; £93bn), while the Irish Republic is currently negotiating what is expected to be an 85bn-euro rescue package. |
| Many commentators have also pointed out that member countries are unable to devalue their own currency - one of the key methods many governments use to trade their way out of recessions, as a weaker currency makes exports cheaper. | Many commentators have also pointed out that member countries are unable to devalue their own currency - one of the key methods many governments use to trade their way out of recessions, as a weaker currency makes exports cheaper. |
| As a result, some have suggested that countries like the Irish Republic and Greece would be better off outside the zone. | As a result, some have suggested that countries like the Irish Republic and Greece would be better off outside the zone. |
| Growth optimism | Growth optimism |
| Mr Regling's comments came as investors digest the Irish Republic's austerity plan unveiled on Wednesday. | Mr Regling's comments came as investors digest the Irish Republic's austerity plan unveiled on Wednesday. |
| The four-year plan is designed to save 15bn euros ($20bn; £13bn) through spending cuts and tax rises, but investors remain unconvinced. | The four-year plan is designed to save 15bn euros ($20bn; £13bn) through spending cuts and tax rises, but investors remain unconvinced. |
| The austerity measures are intended to reduce the Republic's budget deficit, which is the highest in the eurozone. | The austerity measures are intended to reduce the Republic's budget deficit, which is the highest in the eurozone. |
| However, there are doubts about the Irish government's growth estimates, which directly impact its deficit forecasts - many investors see them as overly-optimistic. | However, there are doubts about the Irish government's growth estimates, which directly impact its deficit forecasts - many investors see them as overly-optimistic. |
| The government still expects the economy to average 2-2.5% growth in 2011, and 3.5-4.5% the year after, whereas rating agency Standard & Poor's has said it expects virtually no growth over the next two years. | The government still expects the economy to average 2-2.5% growth in 2011, and 3.5-4.5% the year after, whereas rating agency Standard & Poor's has said it expects virtually no growth over the next two years. |
| There are also doubts about whether the government will be able to push through its austerity measures when parliament votes on the budget on 7 December. | There are also doubts about whether the government will be able to push through its austerity measures when parliament votes on the budget on 7 December. |
| Fund upsize | |
| Compounding this uncertainty are fears that the Irish debt crisis will spread to other countries with high deficits, in particular Portugal and Spain. | Compounding this uncertainty are fears that the Irish debt crisis will spread to other countries with high deficits, in particular Portugal and Spain. |
| All these factors are putting pressure on the euro and government bonds. | All these factors are putting pressure on the euro and government bonds. |
| Much of the money for the Irish bail-out will come from the 440bn-euro EFSF, which was set up during the summer as a general rescue fund for eurozone governments. | |
| European Central Bank council member Axel Weber said late on Wednesday that the fund could be increased if needed. | |
| "Seven-hundred-and-fifty billion [euros] should be enough to assure the markets," he said. "If not, it will have to be increased." | |
| But on Thursday, the European Commission and the German finance ministry denied any imminent plans to upsize the fund after a report in the German newspaper, Die Welt, claimed it would be doubled. | |
| "We think the question does not arise because only one country so far [Ireland] has applied for assistance," a finance ministry spokesman said. | |
| Tax rises | Tax rises |
| The 10bn euros of cuts in the Irish plan include 2.8bn euros of savings in social welfare spending, 24,750 public sector job cuts and a 1 euro reduction in the minimum wage, to 7.65 euros an hour. | |
| The 5bn euros of tax rises include an extra 1.9bn euros from income tax changes, an increase in VAT from 21% to 22% in 2013, and to 24% in 2014, and a new "site value" property tax to raise 200 euros from most homeowners by 2014. | |
| The government has already implemented 15bn euros of cuts in the last two years. | The government has already implemented 15bn euros of cuts in the last two years. |
| The austerity measures have proved deeply unpopular with the electorate, while the governing Fianna Fails coalition partner, the Green Party, has called for a general election in January. | |
| Voters go to the polls on Thursday in a by-election in Donegal South West to elect a new MP to the Irish parliament. | |