Ireland’s cash crisis is set to be at the centre of talks today in Brussels.
European Union finance ministers, and in particular struggling Portugal, want the Irish Republic to accept an EU bail-out in a bid to stop possible contagion.
Investors say the country needs support given the fragility of its banking system.
“The reality is that everybody else has woken up to the fact that Ireland – and Portugal and Greece and probably Spain – is now at the epicentre of a European crisis,” said economist David McWilliam.
“The Europeans have figured that out, the financial markets have figured that out, most of the Irish people have figured that out. So the people who have got us into that, the crisis, the politicians of the ruling party, are the only people who have not figured it out.”
Ireland and Portugal’s borrowing costs escalated to unsustainable levels last week at more than seven per cent – more than twice as much as Britain’s.
While Lisbon said it had no plans to access European emergency funding, Ireland, it claimed was undermining eurozone stability.
Dublin has dismissed reports it wants an 80 billion euro bail-out. But without it, Brussels fears delay could trigger a repeat of the Greek crisis earlier this year that threatened the entire eurozone.