Belfast Telegraph

Brian Cowen vows to battle on as economic woes deepen

Taoiseach Brian Cowen last night insisted he would fight on — but his economic woes deepened as a major new report warned the country was perilously close to calling in outside help from the EU or International Monetary Fund (IMF).

Mr Cowen offered little comfort to Fianna Fail backbenchers as he failed to outline what changes he would make to his leadership, communications and lifestyle as a result of his Morning Ireland interview debacle after a night’s drinking in Galway.

But the persistent grumbling over his leadership was overshadowed last night by two new economic blows.

The cost of borrowing for the country moved higher again on international bond markets, after falling back following last week's government decision to split Anglo Irish Bank.

A report from Barclays, one of Europe's largest banks, said Ireland may yet need financial help from the IMF or the EU if conditions get any worse.

Barclays said: “in the coming months the Government may need to seek outside help”.

While Ireland has raised most of the money it needs for this year, the cost of Anglo and the scale of the deficit meant any further financial shocks could push the country over the edge, the bank warned. It said that there was little room for “further unexpected financial sector losses” and that Ireland was running out of room.

The highly influential bank also advised Ireland to do a “deal” with Anglo bondholders.

Barclays said Ireland might apply for assistance from the IMF at some point if bank losses grow much bigger. It said going to the IMF before that could “cause alarm” on the markets.

Meanwhile, Ireland's borrowing costs continued to edge over 6% last night as concern lingers over the financial position of the country. A plan from last week to split Anglo Irish into two banks has failed to allay the concerns of traders.

Mr Cowen was in Brussels at an EU summit with the Foreign Affairs Minister Micheal Martin.

But the silence from the Fianna Fail backbenchers was an ominous sign for Mr Cowen as the saga continued to play badly among the public.

Mr Cowen said firmly that he did believe he had the support of the Fianna Fail TDs and senators to continue in the job.

“Our mandate is there until 2012,” the Taoiseach said.

Belfast Telegraph

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