Ireland lands '80-90 billion euro' bailout

Europe and the IMF today agreed to bankroll a massive bailout for debt-ravaged Ireland, estimated at between 80-90 billion euros, the second emergency rescue in the eurozone this year.

"I can confirm that the government has made a request for financial assistance to the European Union and the European authorities have agreed to our request," Irish Prime Minister Brian Cowen said after an emergency cabinet meeting in Dublin.

His finance minister, Brian Lenihan, said partners "have not determined a precise figure", but diplomats told AFP "the amount envisaged is between 80 and 90 billion euros" ($110 and 123 billion).

Confirmation of the bailout amount would come at the conclusion of negotiations in Dublin between the Irish government and experts from the European Commission, the European Central Bank and the International Monetary Fund.

Aimed at cleaning up Ireland's devastated banking sector, the bailout is "warranted" to protect Europe's wider economy, EU finance ministers said.

The ECB, which has had to pump in liquidity, also said in a statement "providing assistance to Ireland is warranted to safeguard financial stability in the European Union and in the euro area."

The latest rescue follows a 110-billion-euro EU-IMF package in early May for Greece, where public overspends and dodgy data reporting to Brussels had become endemic.

Ireland will benefit from funds, or loan guarantees, assembled under a 750-billion-euro EU-IMF fund created hard on the heels of the Greek deal.

However, with Cowen's government holding only the narrowest of majorities ahead of a by-election this week, domestic consequences remain unpredictable.

Michael Noonan, finance spokesman for the main Fine Gael party, said there would be targets set down by the IMF and by Europe that the government will have to meet.

"So on the fiscal area they have lost an enormous amount of control," he told RTE.

After conference calls also involving G7 partners in the United States, Japan and Canada, IMF managing director Dominique Strauss-Kahn said his organisation "stands ready to join" the effort for Ireland with a multi-year loan.

The rescue plan emerged amid enormous market pressure to plug a gaping hole in Ireland's banking system, with borrowing costs for Cowen's government soaring.

Dublin had already pumped 50 billion euros into failed lenders, pushing its public deficit to 32 per cent of output -- more than 10 times the EU limit.