Media speculation suggests that the European Commission (EC) has opened an excessive deficit procedure against Ireland today as a result of the state of public finances.
Ireland currently tops the European league table for budget deficits with an 2008 estimate of 6.3 per cent of gross domestic product (GDP), which is more than twice the allowable limit set out in the EU's stability and growth pact.
The EU stability and growth pact is designed to ensure the smooth operation of the euro currency by enforcing fiscal discipline on the 16 states sharing the currency.
With international investors fretting over the poor state of the economy in countries such as Ireland, Greece and Portugal, the commission is insisting on implementing the pact.
There is a growing acknowledgment that failing to implement the growth pact could undermine confidence in the euro. States are still divided over how long they should be given to reduce deficits.