(FT) -- In Dublin on Sunday, Irish government ministers were sticking to the line that the country is fully funded until the middle of next year and does not need to tap the European Union or the International Monetary Fund for a bail-out.
They have depicted any move to go "cap in hand" for outside assistance as a national humiliation, especially in a country that fought for its political independence from Britain 90 years ago.
"It has been a very hard-won sovereignty for this country and the government is not going to give over that sovereignty to anyone," said Batt O'Keeffe, the enterprise minister.
Having set out the choice in such stark terms, the government is now finding it difficult to adjust to mounting pressure from its European partners to make a formal request for assistance, which is required if it wants to access the European Financial Stability Facility.
One pundit has likened Dublin's stubbornness to a husband who has lost his way, but still refuses to take his wife's advice and turn on the GPS guidance system.
In this context, Patrick Honohan, the central bank governor, seemed to play down the humbling symbolism of a bail-out last week, when he said an IMF stability programme would be little different to the government's current austerity plans.
The reality is that the Irish government does have sufficient funds to pay for essential public services up to June or July. And even after that it can resort to the national pension reserve fund, a sovereign wealth fund already used to bail out Ireland's banks, if it is still unwilling or unable to re-enter the debt markets.
One key factor is the balance sheets of Ireland's banks. The concern in Frankfurt and other European financial centres is over the financial positions of the commercial banks, which, despite large-scale taxpayer support, are still heavily dependent on European Central Bank liquidity, as financial market tensions have cut off other sources of financing.
According to data released on Friday, some €130bn in loans to Irish banks were outstanding at the end of October, up from €119bn a month earlier. This means Irish banks made up almost a quarter of the total ECB liquidity in the eurozone financial system -- and that was before the recent sharp spike in Irish government yields.
The banks' problems were underlined on Friday when Bank of Ireland, by far the strongest of the Irish banks, reported that it had lost €10bn in corporate deposits in recent months.
"I will be stunned if the announcement, if it comes, doesn't include the Irish banks in some way," said an Irish economist who asked not to be named.
Ireland's short-term concern is that, if it has to take political heat domestically, there has to be some real financial benefit.
Brian Cowen, the prime minister and Brian Lenihan, his finance minister, are reluctant to sign up to any outside EFSF assistance if doing so allows the ECB to reduce the assistance it is providing to Ireland's commercial banks.
If the Irish government passes the budget on December 7 and calls a general election early in the new year, it would face almost certain defeat.
But then the current opposition would have the humiliating task of calling in outside help.
There is also increasing unrest among backbenchers, fuelling fears that the government may not have the parliamentary numbers to pass the budget.
As pressure from the big economies mount, the preoccupation now seems to be to ensure that any bail-out announcement is perceived as part of a wider effort to shore up the euro, rather than as simply an exercise to address Ireland's problems.
As Mr Lenihan said on Friday: "We have not, contrary to much speculation, applied to join any facility, or avail of any facility. But of course we're an inter-dependent part of the eurozone, and we're in constant liaison with the [ECB] and with the [European] commission."
Source: CNN
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