European Union and the International Monetary Fund experts will begin to scan books in the debt-laden banks of Ireland in Dublin tomorrow in the prelude to a possible aid package to stop the expansion of Europe's fiscal crisis.
Finance chiefs from the 16-country euro zone, said the joint assessment will determine whether Ireland can patch the banking system alone or must rely on the EU and IMF, 750 million euros (1 billion dollars) bailout fund .
"If the banking problems are too big for this small country to manage, Europe has made it clear that they will help," said Irish Finance Minister Brian Lenihan today's state broadcaster RTE as the meetings of European finance ministers in Brussels in question .
As Europe struggled to present a united front to maintain fiscal credibility, Great Britain, said again that support for Ireland, the abandonment of a policy of nonintervention toward the euro region to prevent propagation problems Bank of Ireland in the UK market.
In a blow to Ireland, LCH Clearnet Ltd. raised the margin requirement for trading of bonds in Ireland and 30 percent of net positions, making it more expensive to buy securities of Ireland.
Ireland bonds fell for a second straight day, pushing the 10-year yield up 5 basis points to 8.51 percent. The extra yield on German bonds rose 6 basis points to 567 basis points. The spread, a measure of the risk of investing in Spain, reached a peak of 646 basis points on November 11.
Dublin consultations with the ECB, the European Commission and the IMF will "see if the state is able to meet the needs of the banking sector," said Belgian Finance Minister Didier Reynders told reporters today. "If that's not the case probably will be a European intervention."
'Days' was
This package could meet soon, officials said. "It's six months or a few days I would say is closer to the day," said French Finance Minister Christine Lagarde.
Ministers refused to speculate on the financial requirements of Spain, Barclays Capital estimated at about 80 million euros. Klaus Regling, director of the rescue center, said the EU could get the money within five to eight working days.
Britain, which do not contribute to the 860 million euros in loans and pledges in the wake of the Greek crisis "is ready for Ireland's support," said British Foreign Secretary of the Treasury, George Osborne today in Brussels.
five members of Ireland's ISEQ financial index of bank shares is now worth 2 percent of its peak value in February 2007. Officials that the cost of cleaning up the banking system up to 50 million euros, equivalent to about a third of economic output of Ireland.
Budget Ireland
To increase confidence, Lenihan can release the 2011 budget before the publication date of December 7 and will release a four-year plan to reduce the deficit in the next week.
The measures already taken to save the banking system in Spain, which is increasingly dependent on ECB funding, lay down the deficit to 32 percent of gross domestic product in 2010. That is a record in the history of 12 years of the euro and more than 10 times the block limit of 3 percent.
Investors saw the EU's handling of Ireland in search of clues to the fate of Portugal and Spain, two countries bound by the EU to impose spending cuts to curb the excessive deficit.
A statement late on Monday, 11 February shows a show of support for Greece, which led to three months of politicking - focused on the reluctance of Germany part with taxpayer money - before the bloc designed a formula recovery of 110 million euros.
Greek Payment
Greece and the European Commission considered a complaint from Austria to the European part of the next nine million payment will be delayed until January. The January payment was in the original program, EU spokesman Amadeu Altafaj said. The Greek Ministry of Finance said that the time is not a liquidity problem. "
German demands led to the final phase of the crisis when EU leaders on October 29 agreed to consider the demand for German Chancellor Angela Merkel, a crisis resolution mechanism that requires bondholders to share the cost of the bailouts in the future.
That promise has fired 13 consecutive days of losses in the bond market values dragged Irish and Portuguese, Greek and Spanish. To stop the damage, Merkel on November 12 signed a statement of the five countries that exempt bonds now on the market from a restructuring that could be imposed under a permanent system to be created by 2013.
Merkel wants to penalize bondholders to bet against governments fiscally unsound after the EU rescue fund run time in 2013. In Paris, 15 November, the Greek Prime Minister George Papandreou, the blame for the creation of a "self-fulfilling prophecy" that damage to the peripheral countries.
Greece has made a critical German criticism yesterday. "When I heard the comments of the Greek prime minister I thought, with all due respect, Greece has enjoyed a lot of German and European solidarity," said German Finance Minister, Wolfgang Schaeuble in Brussels. "But solidarity is not a one way street. It should be remembered in Greece."
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