THE GUARDIAN: Brian Cowen defies calls for resignation / Fears that Portugal and Spain may need aid / International rescue plan does little to calm markets / Datablog: how will the bailout be funded and how exposed is each economy?
Financial markets were thrown into turmoil today amid fears that an imminent collapse of Ireland's beleaguered government would have a knock-on effect across the eurozone.
The announcement of the potential €90bn international bailout for debt-laden Ireland – of which the UK could contribute up to £10bn – offered only a temporary respite to nervous markets.
By tonight, concerns that Portugal and even Spain might also need their own rescue packages were rising and sent the euro and shares falling while the risk of holding the debt of potentially vulnerable countries rose alarmingly.
After a tumultuous day in Dublin, where protesters tried to storm the parliament building, the prime minister, Brian Cowen, defied calls for his resignation but conceded he would call an election in the new year. The move was forced upon him after the Green party pulled out of his fragile coalition government, unnerving markets on a day which was supposed to restore confidence in Europe's decade-old single currency.
Instead there was a sense of growing unease in the markets amid evidence that investors felt Portugal would not survive without aid., Dealers said sentiment in the markets was reminiscent of the days after the collapse of Lehman Brothers in September 2008. Read on and comment >>> Jill Treanor, Nicholas Watt and Henry McDonald in Dublin | Monday, November 22, 2010