The euro fell against the dollar before rebounding Markets down after Irish bail-out
The euro fell against the dollar before rebounding The euro was steady against the dollar as markets opened a day after European ministers agreed a bail-out for the Irish Republic.
Ministers have reached an agreement over a bail-out worth about 85bn euros ($113bn; £72bn).
The deal will see 35bn euros go towards propping up the Irish banking system, with the remaining 50bn euros to help the government’s day-to-day spending.
In early trade on Monday the euro was ahead by 0.40% at $1.3241.
It had earlier slipped to $1.3181, its lowest level since 21 September, before rebounding.
Meanwhile, European Central Bank policymaker Christian Noyer sought to bolster market confidence in the eurozone’s rescue for the Republic.
Mr Noyer is the first member of the ECB’s policy council to speak after eurozone ministers sealed the deal for Dublin on Sunday.
“Mr Osborne hopes the eurosceptics in his own party will be reassured that Britain won’t participate in eurozone bail-outs after 2013”
Peston: What the UK is putting in Irish Republic bail-out agreed
He said he was confident the deal would bring down Dublin’s borrowing costs to more normal levels.
“There is no reason to doubt the recovery plans of the two countries,” Mr Noyer said in a speech in Tokyo, referring to Ireland and Greece.
And French Finance Minister Christine Lagarde said the bail-out was “sufficient” and that “irrational” markets were not correctly pricing the sovereign debt situation in Europe.
“The amount [of the bail-out] is sufficient because that will keep Ireland afloat for three years,” she told RTL radio.
France and Germany have also said the Republic of Ireland bail-out should draw a line under its debt crisis.
And they have expressed confidence in Portugal’s ability to correct its finances and avoid needing outside help.
An average interest rate of 5.8% will be payable on the loans, above the 5.2% paid by Greece for its bail-out.
Irish Prime Minister Brian Cowen said it was the “best available deal for Ireland”.
It provides “vital time and space to successfully and conclusively address the problems we’ve been dealing with since the financial crisis began”, he said.
The Irish government has also said that interest payments on all state debt will account for more than 20% of tax revenues in 2014.
The deal does not require the Republic to change its low 12.5% corporation tax.
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