The Irish government has, for the second day in a row, had to come out and deny rumours that an EU bail out is imminent.
Last week was pretty dire for the once ‘Celtic Tiger’ economy as Irish government 10 year bond yields rose to the 9% mark when investors demanded greater risk returns for their money.
Reports on Saturday suggested that preparatory talks had already taken place for the European Financial Stability Fund to provide a rescue package of between â‚¬60 and â‚¬80 billion. And Bloomberg say that Germany is pushing Ireland to formally ask for aid before the Nov 16th meeting of EU finance ministers in a bid to contain the danger of economic contagion.
This is something that the Irish government is vehemently denying. The managing director if the International Monetary Fund (IMF), Dominique Strauss-Kahn, also said that Ireland had not approached the IMF for a bail-out nor did he think one was necessary.
But remember all the denials over the Greek position just before their huge â‚¬110 billion bail-out?
There is also the state of Ireland on the ground to consider. A report by David Sharrock in the Guardian paints a very bleak picture from Dublin.
It appears that many young people are looking to emigrate to avoid the potential financial hardship that an economic collapse would bring.
The words of the economic doom-sayer Morgan Kelly professor of economics at University College Dublin, the man who foresaw the Irish housing collapse, are given great weight in Ireland. He is currently saying that there will be a huge number of mortgage defaults and an extremist uprising along the lines of the American ‘Tea Party’ could occur.
There are an estimated 200,000 mortgage holders in negative equity in Ireland (Independent) and 36,000 mortgage holders have not paid their lender for 3 months or more. 45,000 may be renegotiating payments with their banks and thousands more are facing difficulty.
So while the Irish government desperately tries to reassure the world of its solvency, the truth on the ground may be entirely different. And many of those people on the receiving end of any financial meltdown may not agree with their government that they have to suffer for it.