IMF postpones Irish rescue deal until 16 December

The International Monetary Fund (IMF), which has agreed to provide €22.5-billion loan to Ireland as part of the €85-billion EU-IMF bailout package (See: Ireland succumbs to EU, IMF on €85-bn bailout), has decided to postpone the deal until the debt-stricken nation's parliament (Dail) approves the financial rescue programme.

Irish prime minister Brian Cowen has decided to table the bailout proposal to a parliamentary vote in the coming week, which he expects to get passed without any serious hindrance despite his narrow majority in the Dail.

IMF said In a statement, ''The government of Ireland decided to table a motion on the EU-IMF financial assistance programme for Ireland in the Irish parliament. The vote on this motion is scheduled for Wednesday, December 15, 2010.''

Observers believe that the prime minister's move is to put his main political opponents under pressure before the general election early next year. Fine Gael and Labour, the second and the third largest parties in the Dail, have been strongly critical of an international bailout and the Fianna Fail government's proposed austerity measures.

However, it is felt that any uncertainty or delay in the financial rescue would be a matter of serious concern to the investors.

The bailout is badly needed to prop up the nation's banking system, which has been largely dependent on the European Central Bank and the Central Bank of Ireland for funding. Analysts believe that the banks would have to shrink their assets to qualify for the emergency fund. (See: Ireland to accelerate shrinking of banks: report)