Fear and denial as Ireland awaits its economic fate (News Feature)

By Fiona Smith Nov 15, 2010, 15:47 GMT

Dublin - Fears at the prospect of Ireland being bailed out by the EU Monday were met with fresh government denials that the country needs or wants a bailout to deal with its debt crisis.

Minister of State for Europe Dick Roche said that rumours Ireland was on the verge of seeking a bailout could be 'very, very dangerous.'

'There is continuous talk going on backwards and forwards about the level of our debt, but the suggestion that that constitutes going to the IMF or the bailout is just irresponsible,' he told the private Newstalk radio station.

'Our banks have been under severe pressure and have been very strongly supported by the ECB (European Central Bank), but we have not looked to trigger a mechanism,' Roche insisted.

'Ireland has no need to trigger any mechanism. Ireland is fully funded right through 2011,' he said.

Despite the government denials and bluster about Ireland's sovereignty, many believe international media claims that it's no longer a case of 'if' but 'when' Ireland will be bailed out.

'Our government has made such a fiasco of dealing with the banks and the problems in our banks are beginning to undermine the euro and there is fear of contagion to Portugal. That's what's putting a lot of pressure on,' opposition Fine Gael finance spokesman Michael Noonan said.

Between August 27 and October 29, Ireland's banks received an additional 20 billion euros in emergency liquidity funding from the Irish Central Bank.

At the same time, Irish financial institutions have also seen support from the European Central Bank jump to about 90 billion euros.

Many are now convinced that Finance Minister Brian Lenihan will be forced to tap the European Financial Stability Fund (EFSF) for up to 80 billion euros (110 billion dollars) after EU finance ministers meet in Brussels Tuesday.

'The blanket guarantees that the Fianna Fail government put in place for the banks have caused the problem. International investors have no confidence in our ability to take that kind of strain. The only way of restoring that confidence is an election,' said Labour Party finance spokesman Joan Burton.

'The credibility problem with the government and the banks can only be solved through a change of government,' she added

While unemployment has soared to 13.6 per cent in the three years years since the demise of the booming Celtic Tiger economy, the government, a Fianna Fail and Green Party coalition, has spent 35 billion euros on bailing out the failed Anglo Irish Bank.

Brid O Brien, head of policy with the Irish National Organization for the Unemployed (INOU), fears that work on job creation and investing in the future, which she says has not been properly carried out, will be further jeopardized by a bailout.

'We'd be concerned either way that the work to be done on job creation and investing in the future will not be done,' she says.

'A bailout could lead to a even greater focus on cuts, cuts, cuts, and the impact on unemployed people and others would be even more severe than the cuts in the budget would be.'

Ireland had the lowest rate of unemployment in the EU at 4.25 per cent in 2005.

'It is a bitter moment considering how well this country was doing 10 years ago,' comments Maeve Dineen in Monday's Irish Independent daily newspaper.

But, she goes on to say 'it may also mark the moment when we finally acknowledged and named the scale of our problems.'