BRUSSELS (Bloomberg) - Ireland won approval for an 85 billion-euro ($113 billion) emergency-aid package as European finance ministers battled to contain the fiscal crisis.

Ireland will receive 67.5 billion euros from the European Union (EU) and International Monetary Fund (IMF) and provide 17.5 billion euros from its own pension reserves, Martti Salmi, a spokesman for the Finnish Finance Ministry, said today after EU finance ministers endorsed the plan in Brussels.

With 10-year bond yields averaging over 7.5 percent in Greece, Ireland, Portugal, Spain and Italy on November 26, European leaders are fighting to prevent the spread of Ireland’s fiscal woes from threatening the survival of the 12-year-old euro.

“We have to discuss the broader ramifications of the current crisis and we have to discuss a systemic response to this crisis,” EU Economic and Monetary Affairs Commissioner Olli Rehn before the meeting that was only announced this morning.

Ireland became the second euro country to seek a rescue after the Greek debt crisis earlier this year destabilised the currency and forced the EU to set up a 750 billion-euro rescue fund backed by the International Monetary Fund.

Leaders including Trichet, EU President Herman Van Rompuy, European Commission President Jose Barroso, Jean-Claude Juncker, head of the euro-area finance ministers group, German Chancellor Angela Merkel and French President Nicolas Sarkozy held telephone talks before yesterday’s meeting, the EU said.

“The euro is under threat here,” said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. “The market has got it into its head that it is going to pick off one country at a time.”

Ireland wants to stamp out the “uncertainty” that’s unsettling euro-area investors, Energy Minister Eamon Ryan told Dublin-based broadcaster RTE on Saturday as more than 50,000 people took to the streets of Dublin to protest budget cuts.

As the crisis that began in Greece engulfs Ireland and threatens to pull down Portugal and Spain, investors are looking for yesterday’s meeting to provide details on Ireland’s interest rate and the fate of senior bondholders in the country’s banks.

Ryan said yesterday that a November 25 report by RTE that Ireland may pay as much as 6.7 percent interest for nine-year loans was “inaccurate”.

The Irish government is “confident” it can conclude a “substantial package” with the EU and the IMF yesterday, John Curran, a government spokesman, said in an interview with RTE.

Prime Minister Brian Cowen has overseen the collapse of Ireland’s banking system and national finances after a 10-year property bubble burst, the economy tumbled into recession and unemployment surged close to 14 percent. Cowen’s government is also unraveling. The Green Party, a junior coalition partner, wants January elections and some lawmakers from his own party are slamming his leadership.

“Ireland must not dance to the tune of the ECB and IMF and run the risk of squandering our future by rushing any decision regarding borrowings or repayment terms in the next 24 hours,” Ned O’Keefe, a lawmaker from Cowen’s ruling Fianna Fail party, said in a statement on Saturday.

Ireland’s government plans to cut spending by about 20 percent and raise taxes over the next four years to reduce its budget deficit to three percent of gross domestic product by 2014, from 32 percent this year, when 31 billion euros in capital support for banks are included. The government expects tax revenue for this year to be 31.5 billion euros, it said on November 24.