Monday, 22 November 2010

Ireland gets bailout, China continues inflation fight

It was a relatively eventful weekend.

For financial markets, the most significant event was a bailout for Ireland. Reuters reports:

The EU and IMF agreed on Sunday to help bail out Ireland with loans to tackle the country's banking and budget crisis in a move aimed at protecting Europe's wider financial stability.

Ireland, facing widespread public anger over its handling of the crisis, formally requested the aid on Sunday evening.

"The European authorities have agreed to our request," said Prime Minister Brian Cowen. "I expect that agreement to be finalized shortly, within the next few weeks."

The size of the rescue by European authorities and the International Monetary Fund has yet to be negotiated but is likely to be smaller than Greece's 110 billion euro ($150 billion) bailout last May.

Some details of the bailout can be found here.

Meanwhile, China announced additional inflation-fighting measures. AFP/CNA reports:

China on Sunday announced a further series of measures to rein in rising commodity prices as it steps up efforts to combat rapidly rising inflation, state media said Sunday.

The State Council, China's Cabinet, ordered local governments to boost agricultural production, stabilise supplies and reduce prices, the official Xinhua news agency reported, citing a seven-page document.

It also instructed local officials to ensure oil, gas, coal, and power supplies were sufficient and provide temporary subsidies, Xinhua said.

Local authorities were also ordered to coordinate social-security programmes to provide a gradual rise in basic pensions, unemployment insurance and minimum wages.

The new order comes a day after China said it would will increase grain supplies, open up more land for planting vegetables and crack down on hoarding.

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