11 Dec 2010

IMF approval of Irish loan postponed

8:47 am on 11 December 2010

The International Monetary Fund has postponed approval of a loan of 85 billion euros for Ireland, after Prime Minister Brian Cowen said he will seek parliamentary approval for the bailout.

Mr Cowen is expected to get the rescue package from the IMF and European Union through the lower chamber next week.

But his decision to put it to a vote creates uncertainty and delays.

The board of the IMF will consider its 22.5 billion euro portion of the bailout on Thursday, assuming that parliament passes the package on Wednesday.

Data issued this week showed the estimated borrowings by Irish banks and the country's central bank amount to 140 billion euros.

The Fitch ratings agency has lowered Ireland's 'A' credit status.

Lawmakers passed legislation by 79 votes to 74 on Friday to lower the minimum wage and cut ministers' salaries and public sector pensions.

The budget cuts mark the start of a four-year cycle of austerity that will take 15 billion euros out of the economy.