When Irish Eyes Aren't Smiling

Roubini Global Economics explains the depth of the problem:

The Irish Ministry of Finance announcement has confirmed our concerns about the transformation of the sovereign’s contingent liabilities (the banks) into “actual” liabilities (government debt). A 32% deficit and a debt/GDP ratio of 97% (excluding NAMA) are impressive figures, and the outlook for a small export-oriented economy in a world of competitive easing and greater intervention is poor. Ireland and other sovereigns may still eventually face a trade-off between their own solvency and that of their banks. More here.