Repayment interest rate row may derail Irish bailout

The crucial Irish bailout was at risk Saturday after a row broke out between negotiators over the interest rate payable on the massive loan.

Irish negotiators are desperate to agree the loan in principle with the EU and IMF before the markets reopen Monday in order to prevent further falls in Irish stocks. Fears erupted Saturday after reports the interest rate could be set at 6.7 per cent, higher than the 5.5 per cent rate levied on Greece earlier this year.

Furious opposition parties urged Irish PM Brian Cowen to reject the high rate, with Labour leader Eamon Gilmore stating acceptance would ‘betray the founding principles of the EU’. Violence on the streets broke out in Dublin Saturday as a crowd of more than 50,000 gathered in protest against the austerity budget announced last week.

Left-wing political groups, students and public service workers marched in unison under the flags of the Irish Congress of Trade Unions, demanding a fairer way of dealing with the country’s massive budget deficit. A mass rally including the marchers gathered in O’Connell Street close by the site of the reading of the 1916 Proclamation of Independence.

The rowdiness of the march turned to violence when protestors burned images of Brian Cowen and at least one protestor was arrested. SIPTU trade union boss lack O’Connor said in a speech the recovery plan rescued the rich and left to poor even poorer, raising cheers from the crowds. Ireland’s Trades Union Congress, representing almost a million workers, said the protest was union members’ last chance to influence an austerity budget due out early December.