Ireland and the euro: The Irish problem

THE outline of a rescue package for Ireland is emerging from the vortex of the latest euro-zone crisis. As finance ministers of the euro zone prepare to meet in Brussels tonight, the Irish government is starting to make a fine distinction between what needs and does not need to be salvaged: the state of Ireland does not need a bail-out, it says, but the banking sector needs help for restructuring.

The European Central Bank, which has been helping to buy up Irish bonds to try to prop up the country’s finances, wants Ireland to tap into tens of billions worth of European funds to stabilise its banking sector and avoid the risk of contagion to other weak euro-zone countries. Portugal is wobbling and Greece is expressing exasperation with Germany. Like many, the Greek prime minister, George Papandreou, blamed Germany for setting off the latest round of panic in the markets by pressing the EU to seek a system of restructuring the debts of countries that struggle to pay them. "This could force economies towards bankruptcy," complained Mr Papandreou.

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Ireland and the euro: The Irish problem | The Economist