European Union finance ministers unanimously approved on Sunday an 85 billion euro, or $110 billion, bailout package for Ireland, saying they agreed with the European Commission and the European Central Bank that the move was "warranted to safeguard financial stability in the euro area and the EU as a whole. The Irish government had requested the package on Nov. 22 and approved a three year joint European Union-International Monetary Fund program on Nov. 28.
The 85 billion euro package includes an immediate 10 billion euros for recapitalization of Irish banks, €25 billion "on a contingency basis for banking system supports," and the remaining 50 billion in euros to cover "budget financing needs."
Discussion was also underway, according to a Reuters report, for a bailout for Portugal, which has denied it needs the help of the International Monetary Fund (IMF) after passing a stringent austerity budget on Friday.
Even though earlier German newspaper reports of the European Union (EU) pressuring Portugal to accept a bailout were dismissed as "absolutely false" by European Union Commission (EUC) President Jose Manuel Barroso, German government sources on Sunday said such an action was still under discussion. Jose Socrates, Portugal's prime minister, told reporters in Lisbon that "Portugal has all the conditions to finance itself in the markets as it has done. I have good expectations that approval of the budget will reinforce confidence in the markets."
Concern of contagion has riled the bond markets, sending the bond yields of Ireland, Portugal, Spain, and Greece skyrocketing.
