DUBLIN/BRUSSELS (Reuters) – European ministers are expected to sign off on an 85 billion euro ($112.7 billion) rescue for Ireland today, making it the second euro member after Greece to require a bailout in the face of a crippling debt crisis.
Finance ministers from the 16-nation euro zone are due to meet in Brussels from 1 p.m. (1200 GMT) to discuss the emergency loan package Ireland needs to stem mounting losses at its banks and cope with a massive budget deficit.
Ministers from the broader 27-nation European Union will also gather to approve the aid, which will come from a 750 billion euro rescue facility the bloc set up back in May after Greece was pushed to the brink.
By committing funds for Ireland, Europe hopes to draw a line under a crisis that has severely dented confidence in the 12-year old currency bloc.
But investors could soon turn their attention to other high-deficit countries like Portugal or Spain in what is turning into a high-stakes showdown between markets and politicians.
In a flurry of phone calls over the weekend, French President Nicolas Sarkozy spoke with the leaders of Germany, Italy, Spain and Portugal, underscoring the seriousness of a crisis that has been haunting the euro zone for the past year. Tens of thousands of Irish took to the streets of Dublin yesterday to protest against the looming bailout and Irish opposition parties warned they would not accept a deal that imposed high interest rates on the EU/IMF loans.
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