Ireland has agreed to work with an overseas team on urgent measures to help its crisis-hit banking sector.
Officials from the European Commission, the IMF and the European Central Bank will travel to Dublin on Thursday.
Observers say it is a process that could lead to a bailout, despite Ireland’s reluctance.
Didier Reynders, the Belgian Finance Minister, whose country currently holds the EU Presidency, said: “We analysed the situation yesterday at the Eurogroup, and we will organise a debriefing today. And it’s very clear that we will and we want to start a process with the IMF, the Commission and the ECB to analyse the situation in Ireland and to see if it’s needed (for) Ireland to introduce a demand for help at the European level.”
UK banks are heavily exposed to Irish debt and the British government says it is ready to help, although the exact details of what could be offered have not yet been worked out.
Daniel Gros at the Centre for European Policy Studies in Brussels told euronews: “The UK of course has a very difficult fiscal position on its own. But it’s still triple-A rated because the markets still think that the UK in the end will be able to tough it out. The sums the UK might lend to Ireland are really marginal compared to the overall fiscal picture in the UK.”
The Irish Prime Minister, Brian Cowen, has rejected suggestions his government is negotiating a bailout, slamming the word as pejorative. He said Ireland was looking into what help may be needed.