Understanding Ireland’s bailout: where the money’s coming from
From The Guadrian
How much money will Europe lend to Ireland?
The scale of the rescue package, to be extended over three years, is being negotiated now, as well as the strings attached to it. The Irish government, the European commission, the European Central Bank and the International Monetary Fund should conclude the haggling by next week, perhaps the weekend. The talk is of €80-€90bn (up to £76bn), with a third from the IMF and the rest from Europe.
Where exactly does that come from?
There is a €750bn bailout fund available, set up in May when the Greek debt crisis escalated into a euro survival test. The €750bn comprises three elements: €60bn in “fast-track” funds administered by the European commission, some or all of which would be the first disbursement; a €440bn fund from the 16 countries of the eurozone underwritten by national guarantees from the 16 governments; and finally the IMF puts up a euro for every two euros from the Europeans – €250bn.
What about George Osborne’s £7bn British bailout for Ireland?
Much of this is politics and spin. Despite Europhobic complaints that Britain is paying to rescue the despised euro single currency, Britain, in fact, will be helping Ireland in order to help itself. British banks’ lending to Ireland, at €149bn, is the highest in the EU. An Irish collapse would hammer British banks. The two neighbouring economies are utterly intertwined, not least because of Northern Ireland, and British trade with and exports to Ireland are huge.
Original Article from The Guadrian