Monday, November 15, 2010

Ireland wants to stand alone - yet can it?

DUBLIN – Debt-burdened Ireland is talking with other European Union governments about how to handle its troubled finances, but denied they needed a bailout from an EU rescue fund as the continent's debt crisis continued to challenge policymakers for a response that would calm market turmoil.
Greece, which has already received a financial rescue loan, had to revise its deficit figures upward yet again.
But the main focus was on Ireland ahead of a meeting Tuesday of eurozone finance ministers in Brussels, where they will look for ways to quell market fears of an eventual Irish default.
Those fears are driving up the borrowing costs of other EU nations saddled with red ink, notably Greece, Spain and Portugal.
Analysts said investors needed the finance ministers in Brussels to offer a clear path forward for Ireland to reduce its deficit and bear the costs of its enormous bank bailout.
Irish officials insisted they had no need to seek help because they have enough cash to avoid new borrowing until mid-2011. Still, speculation is mounting that other EU countries are pressing Ireland to stop the rout in bond markets by taking help from the eurozone's euro750 million financial backstop put together with the EU executive commission and the International Monetary Fund.
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