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M. Continuo

Ireland to ask for financial bailout


    DUBLIN (Reuters) - Ireland's government on Sunday accepted the recommendation of its finance minister to seek a bailout from international lenders, a move to shore up its battered banks and secure cheaper state funding.

    Below are a selection of comments from Irish Prime Minister Brian Cowen and Finance Minister Brian Lenihan:

    COWEN ON BAILOUT

    "The European authorities have agreed to our request. A formal process of negotiation will now commence that will lead to the provision of assistance on the basis of programme to be negotiated by the government with the European Commission and the International Monetary Fund in liaison with the European Central Bank.

    "I expect that agreement to be finalized shortly, within the next few weeks."

    COWEN ON FOUR-YEAR PLAN

    "The next step in the process will the publication of the government's four-year plan to solve the problems of the public finances ...

    "The four-year plan will provide a reduction of 15 billion euros by 2014 ...

    "It will be broken down into tax increases of 5 billion euros and spending cuts of 10 billion euros over four years."

    COWEN ON BANK SIZES

    "Irish banks will become significantly smaller than they have been in the past, so that they can gradually be brought to stand on their own two feet once more."

    COWEN ON CORPORATION TAX

    "I can say clearly that the question of changing our corporation tax rate has not arisen."

    COWEN ON INCOME TAX

    "Income tax levels will return to levels applied in 2006 over the period of the plan."

    COWEN ON SOLIDARITY

    "We must have faith in our ability as a people to recover and to prosper once more ... Rebuilding our economy falls to our own efforts as a people. That is where the focus of our efforts must turn as a people, beginning with the four-year plan and then the budget. Now we need to show the solidarity in our own country that our neighbors have shown to us at this time."

    LENIHAN ON IRISH ECONOMY

    "There are underlying fundamentals in the Irish economy which are very, very sound. We have seen a 6 percent increase in exports year-on-year this year."

    LENIHAN ON BILATERAL LOANS

    "The United Kingdom and Sweden have also indicated that they stand ready to provide considerable bilateral loans."

    LENIHAN ON FUTURE BANK CAPITAL FUNDS

    "It is essential that we continue the path of correction in relation to the state finances and in relation to the banking difficulties ...The programme will include a fund for potential future capital needs of the banking sector."

    LENIHAN ON FOUR-YEAR PLAN

    "The four-year budgetary strategy: The strategy will provide the details of the government's commitment to meet the necessary target of 6 billion (euro) adjustment next year and a 15 billion adjustment over the four-year strategy, all leading to a 3 percent GDP deficit by 2014."

    LENIHAN ON BANKING REFORM

    "The European Central Bank has provided massive external assistance to the Irish banking sector and continues to do so, and today's proposals are to deepen the necessary restructuring and fundamental reform that that sector needs."

    LENIHAN DRAWING DOWN LOAN FUNDS

    "It is important to bear in mind that it is not intended to draw down all these monies, particularly in relation to the banking sector. It is important to demonstrate that the reserves are available to meet whatever capital requirements are established, and that that firepower stands behind the Irish banking system."

    COWEN ON BUDGET

    "We will put a budget to the house for the 2011 financial year. I am confident that it will receive majority support, and that it will enable this government to discharge its duty."

    LENIHAN ON BANK RESTRUCTURING

    "One clear option is to look at the asset base of the banks themselves, see what overseas and non-essential assets can be disposed of. By non-essential assets, I'm referring to those assets other than those that are needed to fund business and consumer activity in Ireland."

    COWEN ON DRAWDOWN

    "We haven't agreed what the level of drawdown will be ... Stress testing will obviously have be undertaken in relation to the banking system to see if further capitalization is required.

    "While we have capital of over 80 percent, capital ratios which compare well, it's clear that the markets are looking for perhaps a higher capital ratio in our banking system."

    COWEN ON EU/IMF FUNDS

    "We're getting access to those funds at a better rate, yet to be finalized, than is presently available on the markets."

    (Reporting by Mohammed Abbas and Lorraine Turner)