Berlin, Germany (CNN) -- German Chancellor Angela Merkel and French President Nicolas Sarkozy say they are impressed by the austerity plan Ireland has adopted to tackle its massive debt.
Speaking by telephone Thursday, the two leaders also agreed that European Union negotiations with the Irish government must come to a "swift conclusion," according to a statement from Merkel's spokesman.
The European Union and International Monetary Fund are working on a rescue package for Ireland estimated to be worth tens of billions of dollars.
Individual European nations have announced their own loans to Ireland. Britain is putting together a $11.5 billion package and Sweden's prime minister revealed a $1.5 billion loan on Thursday.
Irish Prime Minister Brian Cowen this week announced the ambitious four-year austerity plan designed to cut spending and increase taxes. The plan saves 10 billion euros ($13.4 billion) through welfare cuts and an additional 5 billion euros ($6.7 billion) through higher taxes.
There will be reductions in the minimum wage and public-sector pay, and a hike in the value-added tax on goods and services, Cowen announced. Water meters will be introduced, students will start having to pay more for higher education, and more Irish workers will start having to pay income tax.