Ireland works on bailout as protesters take to streets

 Ireland was set to complete final negotiations on a hefty international bailout for its debt-laden economy Sunday, despite a major protest against both the deal and the government's austerity programme.

European Union finance ministers were to meet in Brussels to discuss the bailout while the Irish cabinet was set to gather, boosting speculation of an announcement before the markets open on Monday morning.

The loans from the European Union and the International Monetary Fund, worth up to 85 billion euros (113 billion dollars), could be announced later Sunday.

The bailout would target Ireland's struggling banks, which were left exposed by the financial crisis and the collapse of a domestic property bubble, and are intended to try to stop the debt crisis spreading to other eurozone nations.

Irish Communication Minister Eamon Ryan said an outline agreement for the rescue deal would likely be concluded late Sunday.

The final figures are expected to be approved by EU finance ministers and the Irish cabinet.

Ryan played down a report from Irish state broadcaster RTE that the interest rates on the nine-year loans could be as high as 6.7 percent -- significantly more than the 5.2 percent charged to Greece when it was bailed out earlier this year.

"I think that figure was inaccurate and I think it was unfortunate it went out there because I'm sure it scared a hell of a lot of people," Ryan said, the Irish Examiner newspaper reported.

"There are still negotiations going on on that sort of level of detail. It's not fixed yet and we'll have to wait and see until it's actually done.

"The overall figure has to make sense for us in that we are able to pay it back."

Transport Minister Noel Dempsey refused to speculate on the rate.

"The mandate that our negotiators got was to get the very best possible deal, one that will help us to get out of the current situation, based on our four-year plan and our budget," he told RTE.

"This is urgent. I think people would like to have it completed as quickly as possible.... it's more important to get it right than get it quick.

"The government will make the decision on the basis of what's in the best interest for the country."

Earlier, Brian Hayes, deputy finance spokesman for the Fine Gael main opposition party, had also expressed concern at talk of 6.7 percent.

"The scale of the rate that has been speculated about is simply unacceptable in terms of a future for this country. This country cannot possibly grow its way out of the current recession," he said.

EU heavyweights Germany and France are urging a rapid conclusion to negotiations on the package, which will be accompanied by drastic Irish austerity measures, before markets open on Monday.

German Economy Minister Rainer Bruederle, in an interview with the Sunday newspaper Bild am Sonntag, said that while targets should be agreed it was up to Ireland how to meet them, including specific tax measures.

However, he added that EU loan guarantees would be tied to budget savings, better control of banks and increases in state revenue.

The four-year austerity plan revealed Wednesday, key to securing the international bailout, comprises 10 billion euros of spending cuts and five billion euros in tax hikes.

The plan also involves cuts to 25,000 jobs, public sector pay, pensions and social welfare in a bid to slash a huge deficit and save 15 billion euros by 2014.

Those measures were met with protests in Dublin on Saturday attended by tens of thousands of demonstrators.

Some waved placards reading "Eire not for sale, not to the IMF" and "There is a better, fairer way", denouncing the bailout and calling on Prime Minister Brian Cowen to quit.

A spokeswoman for the Irish Congress of Trade Unions (ICTU), which organised the march, said about 150,000 people took part: police put the figure at 50,000.

"We are here to object to the arrogance of the government," ICTU president Jack O'Connor told a rally after the march.

"They want to sign a blank cheque for generations to come. We're not here to pay for the speculators, but we're here to insist on a fair plan," he added.

But there is widespread anger in Ireland at the bailout.

On Friday, voters dealt Cowen's Fianna Fail party a humiliating by-election defeat, cutting the FF/Green Party coalition's parliamentary majority to just two.

Cowen has been fighting off calls from opposition lawmakers to quit over his handling of the economy, insisting he must see through the austerity package and the budget to secure the bailout.

AFP

Other news