34 / 44
The remedy
•
The Irish government announced on 28
th
November 2010 that it had
agreed to the provision of €85 billion of financial support from Ireland by
EU member states (EFSF), the IMF and bilateral loans from the UK,
Sweden and Denmark.
•
The state contributed €17.5bn from the National Pension Reserve Fund
•
European Financial Stability Fund, UK, Sweden and Denmark contributed
€22.5bn
•
IMF contributed €22.5bn
•
European Financial Stability Mechanism contributed €22.5bn
•
Average interest rate across all loans 5.8% (later renegotiated
downwards)
•
The €85bn to be used as follows,
–
€35bn to support banking system, €10bn for
immediate recapitalisation and €25bn on a
contingency basis as required
–
€50bn to support financing of the state
•
Bank Restructuring and Reform
–
Fundamental downsizing and reorganisation of
banking sector to make it appropriate to the size of
the economy
–
Banks to be capitalised to highest international
standards
–
Bankers' salaries capped and bonuses eliminated
IGTA eJournal | Summer 2015 | 32