Irish Republic to get bail-out loan, says central bank

November 18, 2010 05:33

Fears about the stability of Irish banks has led to a rise in the price the Irish government – which has pumped billions into its banks – pays to borrow money. Other eurozone countries that are also perceived as weak are seeing their borrowing costs rise too.

BBC News


Irish Central Bank governor Patrick Honohan has said he expects the Irish Republic to accept a “very substantial loan” as part of an EU-backed bail-out.

“The Irish government could not conceivably go against the advice of its [eurozone] partners and its central bank,” he said.

Were it to do so, commercial customers of Irish banks would accelerate withdrawals which would be devastating, he said.

Once known as the “Celtic tiger” because of the strength of its economic boom, the Republic has since suffered the deepest recession of any country in the developed world, including collapsing property prices and a deeply-indebted banking sector.


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