(Sharecast) Ireland’s government has failed to quell talk of an emergency bailout of the country’s beleaguered economy, despite denying that negotiations with the EU are taking place.
Reports have been suggesting that Ireland may seek up to €80bn (£68bn) from the European Financial Stability Fund.
While European officials have previously been supportive of Ireland’s attempts to solve its debt problems itself through fiscal measures, they are now thought to be concerned that allowing the uncertainty to continue could cause financial instability in other eurozone countries.
Speaking to Ireland’s state broadcaster RTE, justice minister Dermot Ahern denied reports of discussions with the EU but added that “things are happening day by day”.
Junior minister for European affairs Dick Roche said that, while there is “continuous talk” about Ireland’s debt levels, this does not relate to a bailout.
Some reports have quoted anonymous sources as confirming that discussions are ongoing. Ireland’s government is reluctant to seek a bailout because it could mean the EU intervening in the country’s affairs, such as by demanding that they raise taxes.
An EU bailout of Ireland could cost British taxpayers up to £7bn following a deal agreed by the former chancellor Alistair Darling. Shares in RBS, part of which is owned by the British government, have been fluctuating recently amid concerns over the bank’s exposure to Ireland.