Ireland likely to accept EU bailout

Ireland is likely to accept a “very substantial loan” as part of an EU-backed bailout package despite previous denials that it was facing a debt crisis.

Irish Central Bank governor Patrick Honohan said Thursday that the loan amount run into “tens of billions of euros.”

Honohan’s comments come as representatives from the European Union and the International Monetary Fund (IMF) meet in Dublin.

“The intention is and the expectation is, on their part and personally on my part, that negotiations or discussions will be effective and a loan will be made available and drawn down as necessary,” Honohan said.

He, however, stressed that the final decision to accept the loan will be up to the Irish government, which has yet to comment.

The news comes only two days after Irish Prime Minister Brian Cowen denied that the country was facing default and had asked for help.

He claimed that Ireland’s treasury was funded through the first half of 2011, “so the impending sense of crisis that some wish to suggest the Irish state faces is not a fair reflection of the facts.”

This is while data shows that Dublin is facing a record budget deficit of nearly 32 percent of its GDP this year.

It has also been estimated that Ireland’s banks need almost $68 billion to survive.

This has alarmed the debt-ridden eurozone, which is facing a crisis over its single currency — the euro.

“Sharing a currency means that the decisions of one affect all,” EU’s Economic Commissioner Olli Rehn said Tuesday.

He added that whatever happens with the economy of one of the 27-member EU states may affect the economy in another, “in good times and in bad times.”

Countries such as Portugal, Spain and Italy are also at the risk of going down the same road as Ireland.

The renewed financial market turmoil in the EU comes only six months after the bloc rushed to rescue Greece with a 110 billion-euro bailout.