Ireland will not be able to go back to the market to sell its debt in 2012, and will be faced with the need for further support from Europe and the IMF, according to a presentation by Professor Karl Whelan of the University College Dublin.
Whelan outlines how Ireland's growth potential, in the wake of the recession, has fundamentally changed and left the country unable to achieve revenues it previously anticipated. By 2012, Ireland may need to seek the support of the new European Stability Mechanism.
But Whelan's primary worry is what happens with Greece. He notes that if European leaders pull off a successful Greek debt restructuring, they'll be tempted to do the same with Ireland. The result could be ghastly, leaving the ECB bankrupt.
