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Ireland's $90 billion question: Does it need a bailout?

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“What we are all talking about now is whether these bailout packages answer the question,” says Rym Ayadi, senior research fellow at the Center For European Policy Studies in Brussels. “I’m not sure the packages provide a firewall at all. Greece is not yet out from the turmoil, and it isn’t clear that bailout will solve the problems that next cases like Portugal have.”

Iain Begg at the London School of Economics, argues the sheer size of the $1 trillion fund agreed to last May will keep markets calm and avoid a feared larger crisis.

“I’m reasonably optimistic. The EU is an institution that will walk to the precipice, look down, and say ‘We’re not going to jump,'" he says.

Still, he says unforeseen market reactions can always cause problems. “I think the emerging mid-term picture is fine. The question is whether you can get there from here. Ireland feels it is in the jaws of the market, and in crisis.”

Is a bailout inevitable?

The situation highlights differences in the eurozone between nations like Finland, Poland, Germany, and Sweden that have bounced back from the global economic crisis and states like Portugal, Ireland, Spain, and Greece that have not.

Analysts are fairly sure Ireland will take some kind of package – a bailout by the EU stability fund offers much lower interest rates than Ireland can find in the market, where it is now paying around 8 percent.

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