Ireland Claims Bailout from EU and IMF
Ireland has succumbed to pressures from its Eurozone partners to claim for bailout. Portugal and Spain have urged Ireland to claim bailout from the European Financial Stability Facility (EFSF) set up jointly by the EU and IMF with fears of contagion effect. The borrowing costs for these two countries also have gone up along with that of Ireland.
Though EU’s leading countries have promised that they would support Ireland 
during G20 conference in South Korea, markets have not been satisfied. Initially Ireland has denied it would need bailout as that would mean a prestigious issue for a country that once recorded more than 30% GDP growth.
Though it has not been revealed how much aid would be required Ireland’s bailout, Sunday Telegraph is quoted by BBC News that Ireland might need 120 billion euros from the emergency fund. But, Ireland’s finance minister has reportedly said the aid would not cross two digit figures.
Meanwhile, Ireland government is holding cabinet meet on Sunday to discuss 4 year budget plan or austerity plan to be more specific, to get it qualified for the emergency aid. While EU partners are suggesting Ireland to increase its corporate tax from 12.5%, the lowest among EU countries to decrease its budget deficit of 32% of its GDP, the US multinational companies are warning against it. The firms such as Microsoft, Hewlett Packard and Meryll Lynch are among the companies that have warned Ireland that the increasing corporate tax would have negative impact on their investments in Ireland.
Ireland’s lowest corporate tax is said to be an attractive point for FDIs in Ireland. It is learned that instead of increasing corporate tax, Ireland would go for increase in property tax and wealth tax. Austerity measures that are going to be imposed on Ireland’s workers and other common masses will affect them badly and are prone to incite protests. It is ironical that the people, who are in no way responsible for the debt crisis, have to bear the costs of the crisis caused by the greedy private banks that are now in the hands of the government.
Though England is not a member of the Eurozone, it has promised to contribute 12% of the Europe Financial Stability Mechanism (EFSM) of worth 60 billion euros. England has also committed to contribute 4.5% of IMF aid worth 250 billion euros. As Ireland is the biggest trading partner of the UK, It is reportedly planning to offer direct loan to Ireland to support demand for its goods from that country.
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