Ireland requested financial assistance Sunday from the European Union and International Monetary Fund.
Online PR News – 23-November-2010 – – Stocks are down sharply in early trading as concerns grow that the European financial crisis will spread.
It is the second time that the EU has come to the rescue of one of the 16 countries that use the euro. Traders worry that Portugal and Spain may also need bailouts in order to repay their debts, which would could cause the value of the euro to fall.
After falling into a financial crisis brought on by mounting losses at three of its nationalized banks, Ireland formally requested help from its neighbors Sunday. The rescue package from the European Union and the International Monetary Fund will likely total $100 billion.
The request initially pushed stocks higher in Europe. But the Euro Stoxx 50, an index of blue chip companies in countries that use the euro, was down 0.7 percent in afternoon trading there.
In May, the EU and the IMF committed $140 billion to Greece in order to prevent the country from defaulting on its debt. Euro zone members have been willing to prop up each other's finances in hopes of avoiding a financial crisis that could cause the value of the euro to plummet.
Ireland's request for assistance does not put an end to the questions facing the euro zone. Fellow members Spain and Portugal are also saddled with heavy debt burdens and investors fear that they may also need a financial lifeline, putting additional pressures on the budgets of EU members. The euro fell 0.6 percent against the dollar.
China's benchmark Shanghai composite index fell 0.2 percent. The dollar gained 0.2 percent against a basket of six currencies.
Stock futures in the United States were down. Dow Jones industrial average futures fell 32, or 0.3 percent, to 11,148. S&P 500 futures fell 3.7, or 0.3 percent, to 1,194.70. Nasdaq 100 futures fell 1.5, or 0.1 percent, to 2,132.
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