But analysts and investors, as well as some European officials, are arguing that the government’s plan needs to be buttressed by a promise of outside funding to counter the jumpiness in markets that has pushed interest rates on Irish bonds to record highs.
“There is a risk of a self-fulfilling prophecy, ” a European diplomat said, speaking on the condition of anonymity because of the sensitivity of the issue. “Even a denial is seen as some sort of affirmation that there is something to deny.”
On Friday, the storm in the markets was briefly calmed by statements issued by five European ministers at the Group of 20 summit meeting in Seoul and a declaration by the Irish finance minister, Brian Lenihan. But European officials are concerned that more needs to be done before Ireland presents its next budget. That is scheduled to occur on Dec. 7.
The reaction of the bond markets on Monday is the next test for Ireland. Officials said they were preparing a contingency plan in case the markets moved sharply against the country.
Preliminary talks have already taken place on whether Ireland needs to tap outside funding, and on the size of any possible rescue package. Discussions involving E.U. ministers and senior officials continued Sunday, said one official involved in the issue. But by early Sunday evening, diplomats said, there were still no plans for any formal teleconference between the euro-zone finance ministers.
Officials in Brussels and Dublin said that Ireland has not made any formal application to tap an existing loan mechanism and without such an application, no bailout can be approved.