Dublin protesters march against cuts as bail-out looms

BBC News
27 November 2010

…The EU and the IMF are set to lend the country more than 85bn euros ($113bn; £72bn), with the terms of the deal expected to be announced on Sunday ahead of the markets re-opening on Monday.

State broadcaster RTE has reported that the interest rate to be paid on part of the loan could be as much as 6.7%, higher than the rate charged to Greece for its bail-out, which has raised concerns from opposition parties.

However, Communications Minister Eamon Ryan rejected the report, telling RTE radio: “I think that figure was inaccurate, and it was unfortunate because it did scare a hell of a lot of people.”

The austerity package, announced on Wednesday by Prime Minister Brian Cowen, includes proposals to cut the minimum wage, slash the number of public sector jobs and increase taxes in order to save 15bn euros over the next four years…

…The BBC’s Mark Simpson, in Dublin, says it is believed that Mr Cowen has now joined government ministers in talks with delegations from the International Monetary Fund and the European Union.

The complete article, with video, is at BBC News.

Also at the link, What went wrong in the Irish Republic:

The 1990s were good for the Irish Republic’s economy, with low unemployment, high economic growth and strong exports creating the Celtic Tiger economy. Lots of multi-national companies set up in the Republic to take advantage of low tax rates.

At the beginning of 1999, Ireland adopted the euro as its currency, which meant its interest rates were set by the European Central Bank and suddenly borrowing money became much cheaper.

Cheap and easy lending and rising immigration fuelled a construction and house price boom. The government began to rely more on property-related taxes while the banks borrowed from abroad to fund the housing boom.

All this left Ireland ill-equipped to deal with the credit crunch. The construction sector was hit hard, house prices collapsed, the banks had a desperate funding crisis and the government was receiving much too little tax revenue.

The economy has shrunk and the government has bailed out the banks. A series of cost-cutting budgets have cut spending, benefits and public sector wages and raised taxes. But there are still doubts about future government funding.

The main concern for the Republic’s economy is its banks, most of which are now controlled by the government. They have had to borrow at least 83bn euros (£71bn) from the European Central Bank because other banks will not lend to them.

The protest in pictures.

Update: Irish fury as EU nationalises Bank of Ireland:

Despite strong representations from the Irish government that Bank of Ireland was secure, the EU-brokered €85bn (£72bn/$112.5bn) bail-out is likely to demand that billions more euros of capital are injected into the bank to take its key Tier 1 ratio up to 12pc, higher than the demands of the Basel process.

Ireland will also have to provide part of the bail-out funding itself from its National Pension Reserve Fund and will have to pay interest on the loan of above 6pc, higher than Greece’s 5.2pc average interest rate.

Sources said that the move will take the Irish government’s stake in the bank from 36pc to an effective majority stake and dilute all other shareholdings. “It is nationalisation by any other name,” the source said…

Update 2: Ireland bailout protest draws 100,000 to Dublin streets
Demonstrators protesting austerity measures throw fireworks at gardaí protecting the Dáil from anarchist groups.

One of the largest demonstrations in the Irish Republic’s history brought more than 100,000 people on to Dublin’s streets in protest over the international bailout and four years of austerity ahead.

As European officials thrashed out the finer details of an €85bn rescue package, huge crowds braved freezing temperatures to demonstrate against the cuts, aimed at driving down Ireland’s colossal national debt…

A protester waves a flag bearing the Gaelic phrase 'Erin go Bragh' (Ireland forever), expressing allegiance to Ireland

Ireland bailout: From €1,100 a week to living on the streets of Dublin
Homeless man’s descent from full time worker to a tent in a car park shows the plight of Ireland’s economic losers

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