A QUESTION mark now hangs over a hoped-for EU deal on Ireland's €64bn bank debt.
The Germans, Dutch and Finns appear to have rowed back from a key agreement that would free Ireland and Spain of billions in debt incurred through bailing out their banks.
The eurozone's last three AAA-rated countries may now shut the door on Ireland benefiting from the new permanent EU bailout fund, the €750bn European Stability Mechanism.
A statement by the three countries backtracked on an agreement enshrined in last June's summit of EU leaders which, the Government said, would lead to a long-awaited deal.
After a meeting in Helsinki, a joint statement by the three finance ministers said the ESM would only be able to deal with future banking problems and not those from the past.
This was an apparent reference to banks shored up and wound down under our bank bailout programme.
In June, EU leaders pledged to "enhance Ireland's debt sustainability" by easing the burden of the national debt we incurred by guaranteeing the Irish banking system.
Taoiseach Enda Kenny and Finance Minister Michael Noonan hailed the announcement then as a major breakthrough and indicated the ESM would effectively take over the liabilities of the IBRC, Irish Nationwide and Allied Irish Banks. But observers said yesterday's statement appeared to scotch that idea.
When the deal was struck at a summit in June, it was hailed as a "game- changer" as it would break the loop between fragile banks, cash-strapped governments and weak growth.
Under the June deal, such bailouts would no longer be the responsibility of governments but would shift to the eurozone rescue fund, the ESM.
As part of the deal, Ireland was given a promise of equal treatment with Spain. A Government spokesman insisted that the only binding decision made was that arrived at by the EU heads of government in June.
There remained a lot of discussions going on, he said. However, there is said to be "increasing concern" in Dublin over the German-led backsliding on the promise of a deal to settle the banking crisis in Ireland and Spain.
One of the Government's core objectives is for the ESM to take direct equity stakes in the surviving banks -- AIB, Bank of Ireland and Permanent TSB.
John Fitzgerald, of the Economic and Social Research Institute, said: "It leaves the situation extremely uncertain from an Irish point of view.
"Depending on how it is interpreted, it may or may not allow the Irish Government to sell its interests in the surviving Irish banks to the ESM."
Other officials in Dublin suggested the statement by Germany, the Netherlands and Finland was the start of a period of shadow boxing and should not be seen as definitive.