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Deal on EU/IMF rescue package for Ireland by Sunday: report

Nov 26, 2010, 9:03 GMT

Dublin - The multi-billion euro bailout deal Ireland is seeking from the European Union and the International Monetary Fund (IMF) could be agreed as early as the weekend, Irish media reported Friday.

After the pace of negotiations picked up this week, the deal could be completed by Sunday in time for the markets opening Monday, Irish state broadcaster RTE said.

Measures designed to rescue Ireland's banking system are expected to be announced over the weekend.

It is unclear whether details would also be unveiled on how the fund would assist the government's 15 billion economic recovery plan, the Irish Times daily newspaper reported.

The EU-IMF bailout is expected to include 85 billion (114 billion dollars) worth of loans to Ireland, contingent on the austerity plan unveiled Wednesday, which outlines how the government plans to save 15 billion euros over the next four years.

Although German Chancellor Angela Merkel and French President Nicolas Sarkozy were impressed with Dublin's austerity programme, there was no welcome for the draconian plan at home.

There will be no vote on the plan, but the December 7 budget, which implements 6 billion worth of the 15 billion euros in savings and cutbacks, is expected to have a tough time getting through the Irish parliament.

Questions are being raised as to how much the ordinary taxpayer should pay for the risk-taking of investors. Outrage over the bailout has forced Prime Minister Brian Cowen to call an early election in the New Year.

Officials in the EU-IMF mission to Dublin were examining how senior bondholders could be made pay some of the cost of rescuing Ireland's banks, the Irish Times report said.

The government is attempting to reduce the cost to the state by minimising the interest bill on the emergency loans, the report said.

A team of EU, IMF and European Central Bank (ECB) officials arrived in Dublin last week to negotiate a package of loans, after Ireland's debt crisis risked destabilizing the euro.

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