EU mulls Ireland rescue
Top news: Ireland's troubled economy will take center stage at a meeting of EU finance minister today, with many investors and policymakers believing that a bailout of the former Celtic Tiger may be inevitable.
Ireland has gone deeply into debt following Dublin's 45 billion euro bailout of five banks earlier this year. Public debt is expected to balloon to as much as 32 percent of GDP this year, a record for postwar Europe. The yield on Ireland's 10-year bonds has jumped to 8.14 percent this afternoon, signaling low investor confidence in Ireland's ability to repay its debts.
The Irish government has so far denied that it will need to tap the EU's trillion dollar bailout fund, though finance minister Brian Lenihan has indicated that Dublin might be willing to accept targeted support aimed at propping up the ailing banking sector.
Fears are high that the crisis might spread as market turbulence it more expensive for other fragile economies like Spain and Portugal to borrow, raising the possibility of future crises requring intervention. EU President Herman Von Rompuy even suggested that the union's very future might be at stake.
"If we don't survive with the eurozone we will not survive with the European Union," he said.
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-By Joshua Keating |  |
PETER MUHLY/AFP/Getty Images
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