BRUSSELS — European officials geared up to travel to Ireland to lift the lid on the country’s banking woes as EU finance ministers struggled Wednesday to come up with a rescue plan that will keep bond-market turmoil from spreading to Portugal and Spain.
Irish and European Union officials had vowed the day before to stabilize the banks at the center of the country’s financial crisis to restore confidence in the wider 16-nation euro zone but fell short of agreeing on a bailout. On Wednesday, Britain — which has made savage austerity cuts to avoid a debt crisis of its own — also offered help to protect Ireland’s heavily exposed banks.
Ireland insists it does not want a bailout because it has enough money through the middle of next year and is wary of the strings attached to a rescue by the International Monetary Fund. But EU countries are worried that the turmoil is spreading and threatens the stability of the common euro currency.
A $1 trillion backstop — set up last spring by euro-zone countries and the IMF — stands ready to help Ireland and other nations that run out of money, EU officials stressed again Wednesday.
Representatives of the EU, the European Central Bank and the IMF will be in Dublin today to examine government and banks’ books.
Ireland has nationalized three banks and could take over more in a bailout that already has reached $61 billion and likely will push the nation’s 2010 deficit to 32 percent of GDP — 10 times the level allowed under EU rules.
