Irish talks to secure an 85 billion euro aid package entered the final hours on Saturday with opposition parties warning they would oppose any deal that forced the country to pay a high interest rate on EU/IMF loans. Negotiators were holed up in a 250-year-old Dublin luxury hotel to finalise the deal, which the country needs to help it cope with mounting losses at state-owned banks and a massive budget deficit that will rise to nearly a third of total economic output this year.
The rescue, the second in the eurozone after Greece was bailed out in May, is expected to be announced after a teleconference of EU finance ministers at 1500 GMT on Sunday. Thousands of demonstrators marched through the streets of the Irish capital to protest against the deal, which European leaders hope will calm markets and help put an end to a debt crisis that has shaken the 16-nation eurozone.
The fear is that investors could instead turn their attention to other high-deficit countries like Portugal or Spain, testing Europe's readiness to put up more taxpayer money to secure the future of its ambitious single currency project.
Irish opposition parties that are expected to take control of the government in the coming months said a deal would be unacceptable if the interest rate on loans from the EU and IMF was too high. A media report late on Friday said the package could cost taxpayers as much as 6.7 percent a year, although the government denied the cost would be that high.
"If true, it would be an appalling capitulation by the Irish government," Irish Labour Party leader Eamon Gilmore told a party conference. "And it would be a betrayal of the founding principles of the European Union." The government's communications minister Eamon Ryan told a radio talk show that the deal had not yet been sealed but that figure cited by RTE was "inaccurate" and the final rate would be lower.