DUBLIN, Ireland, Nov. 21 (UPI) -- European Union officials agreed to Ireland's request for a financial rescue package expected to be about $90 billion, Irish officials announced late Sunday.
The Irish Times reported Prime Minister Brian Cowen and Finance Minister Brian Lenihan announced the government had applied to the European Union for the aid package and that EU finance ministers had ratified it. Lenihan also said the Group of 7 nations also had given its approval, and the Irish newspaper said it had learned separately that Britain and Sweden were both prepared to extend loans to Ireland.
Cowen said Ireland's banks would be restructured, spending would be cut and taxes raised as part of the bailout. But the Times said a government source said the negotiations resulted in Ireland protecting its 12.5 percent corporate tax from being hiked.
"Irish banks will become significantly smaller than they were in the past," he said.
In Brussels, EU economic and monetary affairs commissioner Olli Rehn said the finance ministers welcomed Ireland's request for aid. "Providing assistance to Ireland is warranted to safeguard the financial stability in Europe," Olli Rehn, EU economic and monetary affairs commissioner, said in Brussels.
Rehn added details of the three-year loan package would be prepared by the end of the month.
Central Bank Gov. Patrick Honohan said the bailout would set the Irish economy "on a more secure path."
Cowen and Lenihan declined to say how much the package would be worth but it's expected to be under $100 billion.
The New York Times said Sunday the need to help Ireland's banks had grown more acute in recent days, and there were fears in financial circles that a lack of action by Dublin and the EU would trigger a full-scale banking panic in Ireland as early as Monday.
The bailout request is putting more pressure on Cowen and his government, The Wall Street Journal reported Sunday, wth the leaders of the country's two largest opposition parties calling for his resignation.
Opponents of the loan have feared it could end with Ireland raising its 12.5 percent corporate tax rate, which is low compared with the 20 percent average for EU nations.
The government is expected to announce plans Tuesday for an austere $20.4 billion budget for the next four years mean to reel in a deficit forecast to rise beyond 30 percent of Ireland's gross domestic product this year, the Journal said.