Under continuous pressure from the EU, Ireland was finally “let go” to European financial stability institutions for help, which means Ireland after becoming the second Greek euro-zone countries receiving aid.

Irish Prime Minister Brian Cowen 21 formal position on the evening of Ireland to the European Union and the International Monetary Fund financial assistance package proposed by the European Union has received the approval of the request. The 3-year financial aid request with the Irish banking sector restructuring and the fiscal deficit reduction plan bundle.

Affected by this news, Monday’s Ireland, Portugal, and Spain’s government bond yields fell slightly. The paradox is that on Monday, rating agency Moody’s sovereign rating to Aa2 Ireland on negative watch list, diving and fall of the euro 1.37 mark. Ireland does not make the final message for help immediately swept away the haze of the eurozone, the euro area still faces many uncertainties risk.

Relent prepared to accept assistance

IMF’s Strauss-Kahn said in a statement said: “I am for the EU and the euro area member of the Irish Government to defend the request for financial stability in response to the financial assistance welcome.” Kahn said that the Irish Government’s request, IMF ready assistance to participate in the multi-year loans.

Outside the Irish government had repeatedly said, do not need the outside world to provide assistance, because of the current financial situation sufficient to support the operation of mid-2011.

EU and Irish officials said the rates will be lower than this year, in May 1100 when the assistance to Greece billion euros, but still need “several billion” euros. From the IMF and the EU expert group on the trip to Dublin on Thursday began to sort out the Irish banking and public finance, balance sheet, to determine how much the amount of the assistance program.

Cowen said the Irish loan size to be negotiated. According to the British “Financial Times” 22, citing people familiar with news that the EU’s rescue loan amount, or 80 to 90 billion euros between.

In a formal request, the Irish government will take two to three weeks to discuss with the IMF and the EU rescue plan details, including the Irish government and the banking industry for a detailed assessment of financing needs, as well as additional conditions of negotiations.

Prior to this, the Irish the next four years will be released this week details the financial plan. The financial “downsizing” plan includes reducing the period 2011 to 2014 at least 150 billion euros in fiscal spending and increase taxes, the Irish almost 10% of annual economic output.

Rescued in exchange for short-term long-term recovery

This means that Ireland will be the first start EFSF the euro-zone countries.

The European Union in May this year approved a “stability fund”, including the total amount of 60 billion euros of European financial stability mechanism and government-guaranteed by the euro-zone countries amounted to 440 billion euros of European financial stability tool (EFSF). IMF will also provide the equivalent of half of the amount provided by the EU, the maximum will reach 250 billion euros. This makes the “stabilization fund” the highest total amount of 7,500 million euros.

However, there is no free lunch. Irish Government is currently striving to minimize the scale of aid to ensure that the relief proposed by the EU and the IMF would not get harsh conditions.

European Central Bank on Sunday night said in a statement, the assistance will be with “a strong policy conditions,” suggesting that Ireland will receive assistance or to make a greater policy concessions.

Among them, Ireland’s low corporate tax policy has become the focus of debates rescue conditions, Cowen, 21, emphasized that whether the increase in corporate taxes was not included in the negotiating agenda.

Multi-country euro zone has been urging the Irish to 12.5% increase, the low corporate tax rate, as a necessary condition for obtaining assistance.

However, the Irish government has repeatedly stressed that will not accept the aid and improve their corporate taxes to be linked to requirements. Deputy Prime Minister of Ireland Mary Crane (Mary Coughlan), speaking in Parliament stressed that the key issue in the corporate tax rate to “not negotiable”, that this is an important national element in attracting foreign investment, refused to increase the tax rate.

This is Ireland has rejected the main reason for the EU and IMF assistance.

The euro area is still vulnerable

Ireland finally accepted the assistance message and did not let the haze of the euro area wiped out – analysts have pointed out that the Irish “starving” the banking industry and other external market or step footsteps of Ireland, EFSF succession after the program expired, pending the euro area risk factors such as the financial system for the euro area is still full of uncertainty.

Following the perimeter of Ireland after the other euro-zone country risk to be overlooked. Morgan Stanley and Societe Generale analyst believes that if the Irish ultimately to EFSF for help, then the Portuguese will also be followed. Fundamentals relative to have a better safety Spain is not one hundred percent, while Spain will be the euro-zone economies of scale “can not shirk.”

Another uncertainty is EFSF expires in June 2013 will be how to continue the time. German Chancellor Angela Merkel had proposed “an orderly restructuring” of the crisis management program requires the voluntary extension of the private bond investors, the bonds bear interest free period or even the loss was exacerbated by the market panic.

The European Union next year will start a set of “European semester” mechanism that allows EU member states to review the budget on a regular basis. In mid-December meeting of the European Commission will discuss the crisis of a permanent solution.

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