Ireland gives thumbs down to EU bailout

EU ministers continue to worry that Ireland's debt crisis will drag down financial markets. Ireland says its debts are covered until mid-2011.

By Jason Walsh, Correspondent / November 16, 2010

Irish Prime Minister Brian Cowen (l.) and European commissioner for economic and financial affairs Olli Rehn meet at Government Buildings, in Dublin on Nov. 9.

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Irish Prime Minister Brian Cowen insisted this evening that his country's finances are not in crisis and that Ireland does not need a bailout from the European Union or the International Monetary Fund.

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But EU finance ministers, who held a meeting with Irish officials today in Brussels, are continuing to add pressure on Ireland to accept financial assistance in order to ease its debt crisis and growing worries over Europe's financial markets.

Cowen made a statement in Ireland’s parliament today insisting the government’s debt were “fully funded” until mid-2011 and that measures taken to control public finances were working. Cowen spoke as the country’s finance minister, Brian Lenihan, met with EU counterparts.

EU authorities, desperate to stop Ireland's debt crisis from spreading to Spain and potentially destroying the euro currency, have been expressing frustration with Ireland’s refusal to accept an aid package.

Prior to today's meeting, an EU diplomat told the German Press Agency [DPA] that Mr. Lenihan had informed European colleagues he had no mandate to negotiate a bailout deal.

Despite this it appears the EU is still pushing Ireland to accept help. Following the meeting, Luxembourgish lawmaker Jean-Claude Juncker, who leads the group of eurozone finance ministers, welcomed the fact that the Irish government would still consider future aid. "We confirm that we will take action to safeguard the financial stability of the euro if that is needed."

Olli Rehn, Finnish politician and European commissioner for economic and financial affairs, said there's some level of confidence that the Irish government's four-year financial restructuring plan and front-loading of financial cuts are enough to see the country through its current problems.

Speculation about a possible bailout has reached fever pitch in Ireland but public pinion is divided as to whether a bailout would be a positive move for the country.