Ireland's situation grows more tenuous as fears spread of default, with Ireland still insisting it does not need outside assistance and the European Union (EU) finance ministers agreeing Wednesday to prepare with the International Monetary Fund (IMF) for a bailout of the country.
Although EU ministers had agreed that the EU, the European Central Bank (ECB) and the IMF would begin talks on a bailout, they did say Ireland would have to decide for itself to accept it. In a Reuters report, Brian Cowen, Ireland's prime minister, indicated that the country itself was not in need of assistance, but the banks might have to be rescued.
Jean-Claude Juncker, Eurogroup chairman, said that the eurozone would be defended. Sixteen nations make up the currency zone. After talks on Tuesday, Juncker said at a news conference, "The discussions that will take place between Ireland and the Commission and the ECB and the IMF will enable us to have at our disposal all the elements and instruments we need were Ireland to make a request for assistance to the EU, the IMF and the Eurogroup."
They don't plan on waiting long to put the strategy into effect, either. Sources said that even though the plan was to focus on the Irish banks, once the mission is complete a rescue will be triggered for more than the banking sector. France's Economy Minister Christine Lagarde said, "If you ask me whether that is a question of six months or of days, I would say we are closer to a question of days rather than six months."
Bloomberg reported that Ireland was preparing to open its banks' books on Thursday to the EU and IMF. The inspection is intended to decide whether Ireland can continue to work on its own to correct its problems or whether funds will be needed from the European Financial Stability Facility (EFSF). The EFSF holds $1 trillion (750 billion euros) against just such an eventuality.
Britain has said that it will support a rescue for Ireland. Previously it had kept itself out of the eurozone in an effort to keep Ireland's troubles from spreading to the rest of the U.K. It also had not contributed to the rescue package for Greece, but George Osborne, the chancellor of the exchequer, was quoted as saying the country "stands ready to support Ireland."
