It is being described as a day of reckoning for Ireland. On Tuesday, European Union finance ministers are gathering in Brussels for their regular monthly meeting -- and the first item on the agenda is sure to be the state of Dublin's finances.
As worries over the country's debt have spread in the past week, the country has come under increasing pressure from the European Central Bank and other countries belonging to the European common currency zone to apply for aid from the €750 billion fund established earlier this year to prop up the euro. Ireland, however, continues to insist that, for the moment, no help is needed.
"I would hope after the (EU finance ministers' meeting) this afternoon and tomorrow there would be more logic introduced into this," Dick Roche, Ireland's European affairs minister, reiterated to BBC Radio on Tuesday morning. "There is no reason why we should trigger an IMF or an EU-type bailout."
Roche did say that Irish banks did face serious liquidity problems. But, he added, "I don't think the appropriate response to that would be for the European finance ministers to panic."
British and German banks are certain to be watching the developments in Brussels closely. According to data provided by Germany's largest financial institutions in the summer as part of the Europe-wide banking stress tests, they hold some $138 billion in Irish debt, with Hypo Real Estate, the crippled German lender, leading the way with a portfolio worth €10.3 billion, according to a report in the German daily Frankfurter Allgemeine Zeitung on Tuesday. British banks have total holdings of Irish debt worth $150 billion.
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