Germany says Ireland bailout not automatic

21st November 2010, Comments 0 comments

German Finance Minister Wolfgang Schaeuble said Sunday he expected Ireland to make a request for a bailout imminently, but warned that approval was not automatic.

"Ireland has announced (that it will ask for the bailout), but it is not formal yet," Schaeuble said on public television. "Then it must be assessed whether the stability of the eurozone as a whole is at stake, that is the condition. We are not just defending a member state but our common currency."

He added: "Ireland has to meet strict conditions, and these will be negotiated in the coming days, so that it is not just providing financing but about ensuring that the problems are solved."

Irish Finance Minister Brian Lenihan said earlier he would recommend to an emergency Irish cabinet meeting on Sunday that Dublin apply for a bailout from the European Union and the International Monetary Fund.

The package is expected to be worth tens of billions of euros (dollars)

Dublin has pumped some 50 billion euros into the country's stricken banks, pushing its public deficit to 32 percent of output -- more than 10 times the EU limit.

Schaeuble said that it was important that the Irish government made its request soon so that there would be no a knock-on effect on other weak European economies.

"This was why in recent days many people have pressed Ireland to address its problems more quickly and not to delay, because the danger of contagion grows the longer this takes," Schaeuble said.

"If we can find the right answer now to the Irish problems, and that is what we are working on, then the chances are high that that there won't be this contagion effect."

© 2010 AFP

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