Ireland Seeks Bailout as ‘Outsized’ Problem Overwhelms Nation

Irish Prime Minister Brian Cowen said he expects talks on the package to be completed in the “next few weeks.” Finance Minister Brian Lenihan said the loan will be less than 100 billion euros ($137 billion), though he refused to give any further details at a press conference in Dublin today.

“A small sovereign like Ireland faced with an outsized problem that we have in our banking sector, cannot on its own address all those problems,” Lenihan said. Ireland may not draw down on the entire loan, he said.

The bailout follows two years of budget cuts that failed to restore market confidence as the cost of shoring up the financial industry climbed. After Irish bond yields soared in the past month, European authorities pushed Ireland to seek aid to prevent the crisis that began in Greece this year from spreading to other euro-area countries such as Portugal.

“It was inevitable. Ireland had no choice but to get financial help,” said Nicholas Stamenkovic, a fixed-income strategist in Edinburgh at RIA Capital Markets Ltd., a broker for money managers. “The market will still be waiting for the details of the assistance and the conditionality, but there should be a relief rally tomorrow.”