Ireland is now another candidate to be the first to exit the euro.
The Irish economy is slumping at a rate few will believe. House prices are down 30%. Its third largest bank, Anglo Irish Bank, collapsed last week and was nationalised on Thursday. On Wednesday, the Irish government denied that it was seeking emergency cash from the International Monetary Fund.
Unemployment is predicted to hit 400,000, a big percentage of Ireland's four-million population, by the end of 2009. It was just 4% a year ago.
Businesses are closing across the country. Dell, a US computer manufacturer, announced this month that it was axing nearly half its 4,300-strong workforce and shifting its manufacturing operations from Ireland to Poland. The entire Irish production of laptops and desktop computers will switch to Lodz, Poland's third largest city, where labour costs are two-thirds lower than in Ireland. Dell has contributed around 5% to Ireland's GDP.
Tax receipts in 2008 were down 14% on 2007. The government calculates that, if it sticks to the pay deal agreed with public sector unions in September, the deficit will rise from 6.5% of GDP in 2008 to 10.5% this year, and remain at 11-12% until 2013. It now wants to rewrite the pay deal in the public sector to reduce pay.
Members of the European Union are meant to keep within a deficit limit of 3% under the rules on monetary union which are now flouted by several basket cases.
Expect the Irish government to demand a bail-out from the EU - and more importantly expect the Germans to make it clear they will not bail out Ireland or the other Pigs (Portugal, Italy, Greece and Spain) which also have rapidly collapsing economies.
But the battle of words is now at fever pitch.
"This is war. Countries have to defend themselves," said David McWilliams, a former official at the Irish central bank.
"It is essential that we go to Europe and say we have a serious problem. We say, either we default or we pull out of Europe," he told state radio.
"If Ireland continues hurtling down this road, which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece," he said.
Former central bankers are not supposed to sound off about the collapse of the euro. Things are getting really serious.
But Mr McWilliams realises that the euro is preventing Irish economic recovery. "The only way we can win this war is by becoming, once again, an export country. We can do what we are doing now, which is to reduce our wages, throw more people on the dole and suffer a long contraction. The other model is what the British are doing. Britain is letting sterling fall so that the problem becomes someone else's. But we, of course, have ruled this out by our euro membership.