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Martin quashes bailout rumour

IRELAND will not have to draw on the emergency financial aid from the EU bailout package, according to EU economics commissioner Olli Rehn and Foreign Affairs Minister Micheal Martin.

The confirmation comes ahead of the Government's detailed explanation of the final cost for Anglo Irish Bank.

Yesterday, international ratings agency, Standard & Poor's estimated that more than €35bn would be needed to bail out the embattled bank.

Mr Rehn said that he wants the Minister for Finance, Brian Lenihan, to outline specific budget measures for the next four years.

Mr Rehn has reconfirmed his confidence in the power of the Government to effectively tackle this problem and said the cost to taxpayers of inaction over the banks would have been "very much higher".

And he said that the although the bailout of Anglo Irish Bank will be reflected in a high-budget deficit this year, this will be a one-off effect and that the deficit for next year will be much lower.

Separately, Micheal Martin has "absolutely" ruled out activating the European bailout package for Ireland.

"By and large we are very confident we'll come out of this," Mr Martin said.

"Clearly it's challenging and so on, but there's no necessity for the triggering of such a mechanism," he added.

Irish bond yields hit a new record high of nearly 6.8pc yesterday as the cost of insuring against Government debt default soared.