Ireland's problems continued to dominate the last day of a European Union finance ministers meeting in Brussels Wednesday, as the EU announced it was preparing plans for a possible bailout.
European Finance Commissioner Olli Rehn told reporters that Ireland has agreed to work with experts from the International Monetary Fund, the European Union and the European Central Bank to look at options for rescuing the country's troubled banking sector.
While praising Irish government's commitment to resolve its fiscal problems, Rehn also left open chances of an eventual EU rescue package, similar to the one the 27-member bloc cobbled for Greece earlier this year.
"This can be regarded as an intensification of preparations of a potential program in case it is requested and deemed necessary," Rehn said.
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Ireland is struggling with an enormous public deficit - expected to be more than 30 percent of its gross domestic product this year. That is 10 times the cap set for European Union member states and well above the Greek deficit.
But the Irish government has so far rebuffed talk of an EU bailout - although it is open to possible help in turning its banking sector around. Dublin has already spent about $61 billion to shore up its ailing banks.
There are fears Ireland's financial problems could spread to other parts of the European Union. Portugal is also struggling with a large public deficit and debt. In remarks at a Brussels policy center Monday, the EU's permanent president Herman Van Rompuy warned the financial survival of the 16 countries - including Ireland - that form the euro currency zone was critical.