Henry McDonald, Elena Moya and Larry Elliott
Nov 16, 2010
An increasingly isolated Irish government was coming under mounting pressure tonight to seek an EU or International Monetary Fund bailout within 24 hours amid fears that contagion from its crippled banking sector might spread through the weaker eurozone countries.
Portugal, Spain, the European central bank and opposition parties urged Brian Cowen’s coalition government to remove the threat of a second crisis in six months by putting a firewall between Ireland and its 15 partners in the single currency.
With finance ministers from the eurozone due to hold emergency talks tomorrow night, financial markets were expecting Dublin to finalise negotiations with the EU over the terms of a deal to allow Ireland to rescue banks laid low by the collapse of the country’s construction boom.
“The Irish problem is spreading, but it could get more volatile,” said Ashok Shah, chief investment officer at London Capital, a fund management firm. “They have to get this bailout, they have a period of time before it gets impossible, before nasty things happen. The longer they leave it, the more difficult it will get.”
This article was posted: Tuesday, November 16, 2010 at 4:41 am