Dublin:
Debt-struck Ireland on Sunday formally appealed for a massive EU-IMF loan to stem the flight of capital from its banks, joining Greece in a step unthinkable only a few years ago when Ireland was a booming "Celtic tiger" and the economic envy of Europe.
European Union finance ministers quickly agreed to the bailout.
Irish Prime Minister Brian Cowen said his country reached an agreement in principle with EU and IMF (International Monetary Fund) donors to provide less than 100 (b) billion euro (140 (b) billion US dollars) to support cash-strapped banks, which are losing deposits and struggling to borrow funds on open markets.
"A formal process of negotiation will now commence that will lead to the provision of assistance on the basis of a programme to be negotiated by the government with the European Commission and the International Monetary Fund in liaison with the European Central Bank," Cowen told reporters in Dublin.
Irish Finance Minister Brian Lenihan spent much of the night talking to other finance chiefs across the 16-nation eurozone about the complex terms and conditions of the emergency aid package taking shape.
The money will come from the EU's executive commission and a financial backstop set up by eurozone nations earlier this year.
There may also be additional bilateral loans from countries outside the eurozone.
Ireland has been brought to the brink of bankruptcy by its fateful 2008 decision to insure its banks against all losses - a bill that is swelling beyond 50 (b) billion euro (69 (b) billion US dollars) and driving Ireland's deficit into uncharted territory.
The country of 4.5 million now faces at least four more years of deep budget cuts and tax hikes totalling at least 15 (b) billion euro (20.5 (b) billion US dollars) just to get its deficit - bloated this year to a European record of 32 percent of GDP (Gross Domestic Product) - back to the eurozone's limit of 3 percent by 2014.
"Put simply, the government has to increase our taxes and reduce our spending to levels we can afford," Cowen said.
The European Central Bank and other eurozone members had been pressing behind the scenes for Ireland - long struggling to come to grips with the true scale of its banking losses - to accept a bailout that would reassure investors the country won't, and can't, go bankrupt.
Those fears have been driving up the already inflated borrowing costs of several eurozone members, particularly Portugal and Spain, on bond markets.
Still, the rapid pace of Sunday's humiliating Irish U-turn surprised many analysts.
More than 30 banking experts from the International Monetary Fund, ECB (European Central Bank) and European Commission had arrived in Dublin only three days before to begin poring over the books and projections of the government, treasury and banks, a mammoth task expected to take weeks.
Ireland's move comes just six months after the EU and IMF organised a 110 (b) billion euro (150 (b) billion US dollar) bailout of Greece and declared a 750 (b) billion euro (1.05 (t) trillion US dollar) safety net for any other eurozone members facing the risk of imminent loan defaults.
Economist, Andrew Hilton, told British broadcaster Sky that Ireland would face strict terms similar to those imposed on Greece.
"When it came to Greece the Greeks were stuffed with all sorts of tough conditions, which they are finding it very, very hard to live up to. It seems most unlikely that the Irish will be treated any more generously," said Hilton.
European Union finance ministers quickly agreed to the bailout.
Irish Prime Minister Brian Cowen said his country reached an agreement in principle with EU and IMF (International Monetary Fund) donors to provide less than 100 (b) billion euro (140 (b) billion US dollars) to support cash-strapped banks, which are losing deposits and struggling to borrow funds on open markets.
"A formal process of negotiation will now commence that will lead to the provision of assistance on the basis of a programme to be negotiated by the government with the European Commission and the International Monetary Fund in liaison with the European Central Bank," Cowen told reporters in Dublin.
Irish Finance Minister Brian Lenihan spent much of the night talking to other finance chiefs across the 16-nation eurozone about the complex terms and conditions of the emergency aid package taking shape.
The money will come from the EU's executive commission and a financial backstop set up by eurozone nations earlier this year.
There may also be additional bilateral loans from countries outside the eurozone.
Ireland has been brought to the brink of bankruptcy by its fateful 2008 decision to insure its banks against all losses - a bill that is swelling beyond 50 (b) billion euro (69 (b) billion US dollars) and driving Ireland's deficit into uncharted territory.
The country of 4.5 million now faces at least four more years of deep budget cuts and tax hikes totalling at least 15 (b) billion euro (20.5 (b) billion US dollars) just to get its deficit - bloated this year to a European record of 32 percent of GDP (Gross Domestic Product) - back to the eurozone's limit of 3 percent by 2014.
"Put simply, the government has to increase our taxes and reduce our spending to levels we can afford," Cowen said.
The European Central Bank and other eurozone members had been pressing behind the scenes for Ireland - long struggling to come to grips with the true scale of its banking losses - to accept a bailout that would reassure investors the country won't, and can't, go bankrupt.
Those fears have been driving up the already inflated borrowing costs of several eurozone members, particularly Portugal and Spain, on bond markets.
Still, the rapid pace of Sunday's humiliating Irish U-turn surprised many analysts.
More than 30 banking experts from the International Monetary Fund, ECB (European Central Bank) and European Commission had arrived in Dublin only three days before to begin poring over the books and projections of the government, treasury and banks, a mammoth task expected to take weeks.
Ireland's move comes just six months after the EU and IMF organised a 110 (b) billion euro (150 (b) billion US dollar) bailout of Greece and declared a 750 (b) billion euro (1.05 (t) trillion US dollar) safety net for any other eurozone members facing the risk of imminent loan defaults.
Economist, Andrew Hilton, told British broadcaster Sky that Ireland would face strict terms similar to those imposed on Greece.
"When it came to Greece the Greeks were stuffed with all sorts of tough conditions, which they are finding it very, very hard to live up to. It seems most unlikely that the Irish will be treated any more generously," said Hilton.
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