The Irish government has agreed to request a bailout from the European Union and the International Monetary Fund (IMF), according to official statements from Ireland and the Eurogroup. The size is likely to be 80 to 90 billion euros, a senior EU official told Reuters.

Separately, the U.K. and Sweden have indicated that they are willing to make individual loans to Ireland.  U.K. taxpayers are likely to contribute 7 billion sterling pounds in total, which includes aid as a part of the European Union and the separate loans it plans to make, according to The Guardian.

U.K. banks are heavily exposed to Irish debt and Ireland is a big exports market for the U.K., so Britain has a strong incentives to financially shore up its neighbor.

European banks in general are exposed to Irish debt.  Furthermore, European officials fear Ireland's deteriorating sovereign debt conditions will spread to other countries like Portugal and Spain and therefore threaten the whole European financial system and the euro currency.

Jacob Kirkegaard of the Peterson Institute said the global banking exposure to Irish debt is over $500 billion, according to Bank for International Settlements (BIS) data.  British and Germany banks account for over half of that exposure.

Both Irish and Eurogroup officials welcome[d] the request for bailout -- which Ireland has stubbornly delayed for at about a week -- to safeguard financial stability in the EU and in the Euro Area.

Ireland likely delayed requesting for aid to exact better terms for the bailout package and the accompanying austerity measures.

The austerity measures are still under negotiation.

It will build on the ambitions Four Year Budgetary Strategy the Irish government unveiled on October 21, which aims to cut the budget deficit by 15 billion euros over the next four years and front-load 6 billion euros of that amount for next year.

Ireland's 12.5 percent corporate tax, something the country seems determined to defend from any austerity measures, will not form part of the [austerity] negotiations, according to the Irish Times.  This low tax allegedly gives Ireland an advantage in attracting foreign direct investments.

The bailout program will also aim to shore up and restructure Irish banks, who are at the root of the crisis.  Specific measure may include a fund for future recapitalization needs, guarantees for liabilities, and asset segregation.

Email Hao Li at hao.li@ibtimes.com