Ireland: An extreme version of the British disease
BBC business editor Robert Peston on Dublin's financial woes
Any Briton tempted to gloat over the woes of Ireland should probably think again, in that Ireland's financial crisis could easily have been the UK's.
The point is that Ireland's flaws are an extreme version of what happened here:
1) Banks that became too big and too dependent on overseas borrowing relative to the size of their respective economies;
2) Banks that lent far too much to commercial and residential property, fuelling an unsustainable boom that has gone pop;
3) Governments that became too dependent on property taxes which collapsed when recession set in - contributing to the emergence of a black hole in the public finances;
4) An overall burden of debt, aggregating household, banking, commercial and state borrowing, that was a humungous 700% of GDP in Ireland and an eye-popping 400% of GDP in the UK (more than for any other big rich economy apart from Japan).
Why has Ireland had the humiliation of being forced to admit that it is unable to pay its way in the world whereas the UK government is still able to borrow vast sums at record low interest from commercial lenders and can swank that it has the means to be a generous rescuer of Ireland?
There are a number of reasons, which probably include how the UK has tackled its own recent financial crises and that the UK has an independent currency and central bank. Even so, Ireland's dismal fate could easily have been the UK's - and, if global financial storms were to rage again, could yet be.
Obviously the important question now is whether the European Union's rescue of Ireland has sealed in the infection, allowing the rest of the eurozone economy to recover, or whether it simply provides temporary respite. To put it more bluntly, will Portugal be next?
Portugal insists it can muddle through. But that is not being taken for granted by the European politicians and officials to whom I've spoken in the past 24 hours, because although Portugal's banks are not as bloated or as weak as Ireland's, its private-sector economy is arguably less robust.
For what it's worth, if Portugal were to go cap-in-hand for loans to the European Union and International Monetary Fund (IMF), the UK would be less prominent in the rescue, officials tell me - for the self-interested reasons that Portugal is rather less intertwined into the British body politic/economic than Ireland.
PS: The shape of the Irish rescue is being slightly clearer.
The total size of the bail-out package is expected to be between 80bn and 90bn euros. Of this, something over 30bn euros is expected to be earmarked for injecting additional capital into the banks, to strengthen them against future losses.
The bank most conspicuously in need of additional financial support is Allied Irish Banks. Of course, Anglo Irish Banks is weaker, but the government already put it on a path to being wound up. What's less clear is whether Bank of Ireland will become largely nationalised in this new round of reinforcing the Irish financial sector.
The UK's share of the Irish package of succour, including indirect loans and a possible direct bilateral loan, might well be 9bn euros.
You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.