European Union finance ministers formally approved today an €85 billion aid package for Ireland, put together jointly by the EU and the International Monetary Fund, an EU diplomat said.
The ministers also approved the conditions on which the aid is granted and the extension of the deadline for Dublin to bring its budget deficit below the EU ceiling of 3% of gross domestic product to 2015, from 2014.
'The decision on aid for Ireland has been adopted, together with a recommendation setting conditions,' the EU diplomat said.
EU finance ministers met in Brussels today amid continuing disagreement over how best to tackle the threat facing the single currency.
Despite reports that the IMF was recommending an increase to the €750 billion rescue fund, the president of the group representing the 16 euro zone countries, Jean-Claude Juncker, said he saw no need for the fund to be increased.
Ministers also continued their work on a permanent rescue mechanism to take effect in 2013, once the temporary fund and from which Ireland has just been bailed out, expires. This was agreed in May.
But all this is overshadowed by the threat of Portugal, and even Spain, needing to be rescued next.
While bond investors still appear unconvinced that the politicians have a clear strategy for restore the euro's fortunes, there is growing political division over the best solution.
Belgium, which holds the EU presidency, and which has seen its own bond yields increase, wants the €750 billion fund increased as, apparently, does the IMF.
Luxembourg and Italy have thrown down the gauntlet calling for the creation of euro bonds and there appears tacit support from the European Commission.
But both ideas have been scotched by Germany, and at last night's Eurogroup news conference Luxembourg's prime minister appeared to accept that the focus should remain on countries reining in their deficits.
Dismissing fears that the current rescue fund will not be sufficient should other countries falter, the head of the European Financial Stabilisation Fund, Klaus Regling, said the Irish bail-out used up only one tenth of its resources.
