Ireland: A problem soon to be shared
Small countries shouldn't make gigantic bets. That's the lesson that Iceland learned early. When the crisis hit, the country's three largest banks had foreign debts worth more than six times the country's GDP. There was never any prospect of Iceland's taxpayers covering that lot - and they didn't.
In Ireland, the decision was less clear-cut. There was always the possibility - however slim - that the Irish economy would be able to come through the crisis without stiffing the foreign creditors that lent the country the equivalent of five times its annual GDP.
So, Dublin has had a slow-motion crisis rather than an Icelandic bonfire of the creditors - and Ireland's roughly 2 million taxpayers are picking up the tab for tens of billions of misplaced private bets.
If the end result is similar, Ireland's citizens may well wonder whether the battle to preserve Ireland's good name in international markets was really worth all this pain.
But, as the finance minister Brian Lenihan knows well, Ireland has one crucial advantage which Iceland lacked. It is a member of the euro. That means its problems are also the eurozone's. It also means that the European Central Bank (ECB) - and other eurozone governments - will have a big say in where Ireland goes from here.
It's possible that Ireland wouldn't have got into quite such a mess outside the euro. It would have been able to take some air out of the boom - maybe - by raising domestic interest rates. And its banks and businesses would not have been able to borrow quite so cheaply from abroad. But all that is in the past. Since the crisis hit, being in the single currency has been an important crutch.
Anglo Irish has been deemed too big to fail
Ireland would almost certainly have gone the way of Iceland by now, had the markets not assumed that its fellow eurozone governments would ultimately bail it out, and - crucially - Ireland's banks had not been able to borrow unlimited amounts from the ECB. A year ago, Irish banks had borrowed an amount equivalent to 10% of their total assets from the ECB. The share has fallen a little since then (for reference, borrowing by Greek banks is running at about 20% of their total assets), but that more-or-less free liquidity from the central bank has been a crucial safety valve.
Robert Peston has described Ireland's situation in great detail in recent posts. As we have both pointed out, Mr Lenihan has protected himself from any immediate embarrassment in the markets, by pre-funding the deficit until well into 2011. The government is sitting on substantial cash reserves, and today's 6.4bn-euro injection into Anglo-Irish has also been designed in a way to avoid actually putting any cash in right now.
So, once again, this is a slow-motion crisis. But even though the government has done everything to avoid it, Ireland may still be forced to follow in the footsteps in Greece, and head to the eurozone and International Monetary Fund (IMF) for support.
In the case of Greece, European governments would not face up to the problem until it had got significantly worse. Now there is a formal support mechanism in place - the European Financial Stability Facility (EFSF) - you might think the process would be less fraught. But I wouldn't bet on it.
Unlike Greece - which wanted to go to the IMF from the start of 2010 - Ireland still thinks there a chance to avoid it.
Other eurozone governments won't want to seem to be pushing them in that direction. As we know, they were rather hoping that the sheer existence of the EFSF would be enough reassurance to the markets, and it would never actually have to be used.
But that leaves Ireland - and other countries on the eurozone periphery - in a difficult limbo. Ask anyone in the financial markets, and anyone in Brussels - they all expect the crisis in the eurozone to have plenty more rounds.
It also leaves the ECB sitting on a mountain of IOUs from Greek, Portugese and Irish banks, backed by collateral which is probably not very good. (Why give the ECB your best collateral, when it will take pretty much anything you've got?)
The ECB's head, Jean-Claude Trichet, would very much like to get out of the business of providing all of this "unconventional" support. But of course, the member governments would like to put off that day as long as possible. Why? Because once that below-the-radar safety net goes away, the eurozone might have to decide how far they are really willing to go, to ensure that every last penny of every bad bet on a eurozone country gets repaid.