Ireland bailout removes risk to banks: French minister
French Finance Minister Christine Lagarde says the EU and the IMF sent a "very strong message" to the money markets in a move designed to prevent the collapse of Irish banks.
In an interview with AFP after Europe and the IMF agreed Sunday to bankroll a massive bailout for debt-ravaged Ireland, estimated at between 80-90 billion euros, Lagarde said the move came as a much-needed "guarantee".
Following the second emergency rescue in the eurozone this year, the minister said: "The first message is that concerning the budget, Ireland agrees to the necessary measures."
The second "very strong" message was that the aid programme by the EU and International Monetary Fund should lead to "the setting up of a recapitalization fund to ensure the liquidity and solvency of the Irish banking sector."
The exact amount of European aid to the Irish banks "remains to be determined, it has not yet been finalized," said Lagarde, explaining that the EU executive Commision, the European Central Bank and the IMF still had to "negotiate with the Irish government the amount, the calendar and the conditions."
France, she said, remained "completely supportive of Ireland" with President Nicolas Sarkozy having thrown his backing behind the "unprecedented budgetary efforts."
© 2010 AFP