EU issues €2.3-bn bond to support Ireland

The European Union yesterday cleared a €2.3-billion fund for Ireland by placing a benchmark 15-year bond, as part of its rescue package.

The decision follows the sixth successful review of the assistance programme for Ireland, the country that was bailed out in December 2010 by the European Union and the International Monetary Fund (IMF), following the collapse of its property market in 2008 and the subsequent debt crisis. (See: Ireland succumbs to EU, IMF on €85-bn bailout)

The financial assistance agreed amounted €67.5 billion to be provided through the EU's European Financial Stabilisation Mechanism (EFSM) and bilateral European lenders contributing €45 billion and the IMF paying the remaining €22.5 billion over a 3-year period.

So far, EFSM has disbursed €20.7 billion to Ireland, including yesterday's €2.3 billion. The amount will be disbursed to Ireland next week.

During the first half of 2012, EU raised a total amount of €12.8 billion for financing Ireland and also Portugal, another eurozone nation bailed out in May 2011.  (See: Portugal secures €78-bn bail out package from IMF)

The remaining funding requirement for these two countries in the current year is €3 billion which will be raised from September.