Ireland in Talks With European Officials About 'Market Conditions'

Ireland is in talks with European officials about "market conditions" amid widespread speculation that the country will accept some form of bailout.

"Ongoing contacts continue at official level with international colleagues in light of current market conditions," a Finance Ministry spokesman said in an email late yesterday, Bloomberg News reported.

"Ireland has made no application for external support" and the government is "fully funded till well into 2011," the spokesman said.

Speculation of a bailout package has mounted in recent weeks as the cost of supporting the country's banks continues to grow. Banks such as Allied Irish Banks (AIB) and Anglo-Irish Bank are weighed down with past-due loans tied to the country's real-estate bubble.

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Allaying concerns about Ireland's finances would help advance plans from Germany's Chancellor Angela Merkel to require investors to bear some of the cost of any future sovereign bailout, Bloomberg News said.

"As long as European governments go back and forth, the markets won't settle down," said Marco Annunziata, chief economist at UniCredit Group in London. "We're likely to see markets getting more nervous and worried about what is going on in Europe."

Ireland has strongly denied reports that it will turn to the EU for financial aid. Enterprise Minister Batt O'Keefe has said that the country is not going to give up its "hard-won" sovereignty.
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