DUBLIN (Reuters) - Ireland has asked for help under the European Financial Stability Facility (EFSF), a temporary budget safety net, and finance ministers from the group have approved the help.
Following is reaction from analysts:
FILIPE GARCIA, ECONOMIST AT INFORMACAO DE MERCADOS FINANCEIROS CONSULTANTS IN PORTO:
"I think it means Portugal is next (to request help). I don't know if it will happen before the end of the year or after, but it's almost inevitable now.
"What could avert it is a change in the rules by the European Union toward a fiscal union, but frankly I don't believe they can act on that soon enough.
"I think we've probably passed the tipping point of what is sustainable in terms of paying interest rates on debt.
"People are right saying there are differences -- the causes of the crises are different. In Ireland it's about banks and here it's about structural deficit, but the weight of the debt in terms of gross domestic product is similar.
"The problem is in the governance of the euro. Euro is a political animal that needs help to survive."
PEDRO SCHWARTZ, ECONOMIST AT SAN PABLO UNIVERSITY IN MADRID ON MARKET PERCEPTION OF SPAIN vs IRELAND, PORTUGAL:
"It is differentiated if the government carries out its measures, what was worrying the markets was the growth in deficit because the amount of deficit wasn't that big, it was still under 60 percent. It was the speed at which the deficit had appeared and then grown and that may be controlled by these last measures. So there won't be any growth in the deficit.
"Increasing unemployment is a worry, and people are going to home in on that because increasing unemployment does mean you are going to have to give a subsidy to the unemployed and no growth in tax intake.
"Those are the two stumbling blocks in the way of Spain."
ON THE EUROZONE:
"The euro is under the spotlight, it doesn't seem to be healing. The institutional details of the euro are proving to be fragile and if there is going to be a succession of crises then people are going to say it doesn't seem that the single currency is working properly. That of course will affect Spain, rather than Spain being the cause of it.
"I don't know what the markets will say tomorrow. They may turn on Portugal and perhaps force it to take a bailout. If Portugal is forced to take a bailout then they'll turn their attention to Spain and I don't know what the government will do. I think Spain is differentiated but they're not out of the woods. And the euro in general is not out of the woods."
CARSTEN BRZESKI, ING FINANCIAL MARKETS
"I don't know whether it will work for Irish domestic politics but it should work for financial markets and calm things down. A lot will now depend on the actual EU-IMF programme and the requested measures. Most focus should be on the Irish banking system which will make the programme again different from the Greek case.
"Will it prevent contagion? In the short-term, but not in the medium term. It only calms down markets and gives the other countries some room to breathe. Particularly, Portugal is not off the hook, yet.
"I still think that the main cause of contagion comes from the German proposal to include managed default in a future permanent crisis resolution mechanism. As long as this issue is far from clear, speculation and possible contagion will stay alive.
"European politicians should now use the small window of opportunity they get from the Irish bailout to come up with a detailed and clear plan for the permanent crisis resolution mechanism."
GEOFFREY YU, FX STRATEGIST, UBS, LONDON
"Really it's just the inevitable happening."
"What is important for the euro zone now is how the bond markets react in the coming weeks and whether there is a buyers' strike for Portugal or Spain."
"It is to be expected that the euro might see a short rally on the back of this. In the meantime, the risk outlook for markets is rather uncertain....At the same time, it does remove a layer of instability for the euro zone in the short term."
PETER CHATWELL, RATE STRATEGIST, CREDIT AGRICOLE CIB, LONDON:
"So far it sounds pretty much in line with expectations ... figures of 80 billion (euros) were the sorts of numbers being bandied about.
"Ireland gets a bailout but the most prized piece of its fiscal policy is not changed. I think it is going to be seen as fundamentally good news from their perspective, dramatically reducing the default risk.
"In the short-term this should be positive for risk appetite. It should be something (German) Bunds see as a negative.
"I don't think this does anything to take Portugal and possibly Spain out of the firing line."
(Reporting by Andrei Khalip, Sonya Dowsett, Jan Strupczewski, Nigel Stephenson; editing by Janet Lawrence)
