Ireland - European Union

Irish PM promises New Year election as bailout agreed

Reuters/Cathal McNaughton

The Irish government has announced it will hold an election in January, after Ireland finally accepted a European Union-led bailout of its ailing economy.

Advertising

The Greens said the Irish people "feel misled and betrayed" after Irish Prime Minister Brian Cowen did an about-face, agreeing to an estimated 90-billion-euro rescue package to shore up the banking sector.

Meanwhile there were clashes with police as around one hundred protesters attempted to force their way into the parliament, located in Dublin.

Ireland's request for aid was finally approved by EU finance ministers during an emergency conference call late Sunday.

It came after a week in which the government insisted it did not require help, prompting members of the European Commission and International Monetary Fund to visit Ireland for talks.

The call for a January election is detrimental to a government facing a by-election on Thursday that is primed to further reduce its slim majority.

The Irish press, meanwhile, was livid, arguing the country had been humiliated by its U-turn.

Dossier: Eurozone in crisis

Confirmation of the rescue package calmed fears over the euro, with the single currency rising above 1.37 dollars before falling back to 1.3637 dollars in later trading.

Finance Minister Brian Lenihan said one of the key conditions of the rescue deal was that "structural change" was required for Ireland's banking system.

But he said it would be an “intensification” of the type of measures already adopted, adding it would take "several weeks" to finalise the exact amount of the bailout.

Portugal, another debt-laden eurozone economy causing concern in the EU, insisted Monday it had no need for financial aid.

Daily newsletterReceive essential international news every morning