Ireland:Ireland is under pressure from Germany to preemptively tap the European Financial Stability Fund EFSF) to try avoid a protracted uncertainty.
So far Ireland is resisting on the basis that the various measures it plans to put in place will allow it regain the confidence of the markets.
The decline in yields demanded on Irish debt yesterday will have strengthened its hand ahead of today.
Spain:
Spain has sought to distance itself from the renewed debt crisis afflicting smaller eurozone economies, insisting its austerity plans are on track and reminding investors that financial markets judge the country to be more like Italy than Ireland in terms of risk. Has not commented on Ireland but the governor of the Bank of Spain has urged Ireland to act.
Germany & Austria
: Germany is pushing Ireland to preemptively tap the EFSF to resolve the crisis because it believes a bail out is all but inevitable. Berlin is confident that, unlike last week, markets will not be unsettled by today’s discussion
about a new structure to replace existing temporary EU bail-out structures that expire in 2013. Asked how further market jitters could be prevented, a senior official in Berlin said: “Only Ireland can answer that.” Other “core” Eurozone members
such as the Netherlands and Belgium are expect to support.
Greece:
Greek Prime Minister George Papandreou said Berlin's demand that banks and bond markets share the pain of a sovereign debt default could push some euro zone economies towards bankruptcy. "It created a spiral of higher interest rates for countries that seemed to be in a difficult position, such as Ireland or Portugal," Papandreou said during a visit to
Paris. "This could create a self-fulfilling prophecy ... This could break backs. This could force economies towards bankruptcy."
Italy:
Has a marked reluctance to see Ireland having to resort to an EU bail-out for the very obvious reason that the market instability prompted by such a rescue package could easily have negative repercussions on the heavily indebted Italian economy.
France:
Paris does not believe it is inevitable that Ireland will request a rescue package, but the French are anxious that Ireland takes the "necessary decisions" to calm markets and ease pressure on the euro. Paris is less pessimistic than
Berlin about Ireland's situation, and has a more "flexible" stance towards the possibility of Dublin availing of the bailout.
Portugal:
The Portuguese are not complacent. As the eurozone debt crisis has deepened, they have become increasingly aware of the dangers for their country. Finance minister Fernando Teixeira dos Santos yesterday said there
was a very real risk of contagion. But they have not pressed for Ireland to seek a bailout.
Eurogroup
: Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, said he doesn't expect imminent agreement on a bailout for Ireland because Dublin hasn't asked for support. "I don't think we're nearing an agreement because Ireland didn't put forward a request,"
The European Central Bank (Frankfurt):
The ECB has stepped up pressure on Ireland to accept a rescue package because of fears the debt crisis will engulf the euro economy. They want the Government to use the money to further strenghten the banking system and reduce its dependence on the ECB for liquidity.
The European Financial Stability Fund (LUX):
The head of the euro area's financial backstop plans to attend
tomorrow's meeting of European finance ministers. Klaus Regling “has a standing invitation to attend the euro group meetings and, as he has in the past, he will attend the next one,” said a spokesman.