(CNN) -- Ireland has formally requested substantial "financial assistance" from the European Union to buttress the government and bolster its struggling banking sector, Prime Minister Brian Cowen said Sunday night.
The European Union has agreed to accept the request, and negotiations are currently under way to determine the exact loan amount, as well as its terms, according to Cowen.
Brian Lenihan, Ireland's financial minister, said that the country would ask for less than 100 billion euros from the EU and International Monetary Fund.
The comments came at a Dublin news conference around 8:30 p.m. Sunday, which followed a meeting of Cowen's Cabinet.
At that meeting, Cowen said that the government planned to cut 6 billion euros before it wraps its current budgetary cycle on December 6, and would eliminate a total of 15 billion over the next four years.
The Irish government had insisted for more than a week that it doesn't need money from abroad to stay afloat despite the crisis, but the European Union and International Monetary Fund began discussing a possible bailout days ago.
Ireland shares the euro with 15 other European nations, and its perilous financial situations has raised concerns about a trickle-down effect on the common currency and the wider European Union.
Fears that Ireland will be swamped by a crisis in its banking sector have put strain on the euro and markets, and other European countries have been pressing Dublin to apply for help.
Officials from the European Commission, the European Central Bank and the IMF have been meeting officials from Ireland's Department of Finance and the National Treasury Management Agency since Thursday, hashing out measures required to bring stability to the Irish banking system.
The money is required to stave off the collapse of Irish banks, which have seen a major outflow of funds over the last year, the Irish government said Sunday.
International loans would act as a contingency fund "providing a powerful display of firepower," Lenihan said Sunday.
The banks might not need to draw on the money, he said, suggesting that the mere fact that the funds were available might make it possible for Irish banks to borrow money on the open market again.
The EU and IMF bailed Greece out to the tune of 110 billion euros (currently $150 billion) in May of this year.
A "correction" of 6 billion euros ($8.2 billion) will need to be made in the next Irish budget, the government said Sunday as it announced the cabinet meeting.
The country is trying to cut its deficit to 3 percent of GDP by 2014, the government says.
The new budget will be announced "in the next days," the government said.
The Irish government has pumped billions of euros into Irish banks to keep them afloat, effectively nationalizing most of them. The European Central Bank is lending money to Irish banks because other banks won't.
The head of the Irish Central Bank, Patrick Honohan, told state broadcaster RTE Thursday that the negotiations with the IMF and European officials were not about a bailout, but would lead to a loan of tens of billions of euros to Ireland.
The money would go directly into Irish banks to shore up investor confidence, he added.
One analyst said Ireland has no choice now but to accept outside money.
"In actual fact Ireland as a country, in financial markets, has no reputation now. We've got to rebuild it, and the reason you rebuild it -- or how you rebuild it -- is you rebuild your balance sheet," author and economist David McWilliams told CNN Thursday.
"The situation is, if there is no money, we can't pay. And there is no money. That's why the IMF are here. If we had money, they wouldn't be here."
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