Finance Minister Michael Noonan said securing a precautionary credit line prior to exiting the EU/IMF bailout programme was not essential because of the country’s successful re-entry to the bond markets.

The eurogroup of finance ministers would have to decide whether the ESM is used to recapitalise the Irish banks, but the ECB backs any proposal that breaks the link between banks and sovereign debt, said its president Mario Draghi.

The troika is in the final stages of organising a series of measures designed to further ease the pain of the country’s massive borrowings and help re-entry to the markets.

Over the next two months, Ireland should see substantial changes to its debt situation as the country prepares for a full return to the markets, but lack of growth posed a threat to democracy, Finance Minister Michael Noonan warned the EU.

The ECB left the main interest rate on hold at 0.75% at its latest monthly meeting, but the bank’s president Mario Draghi warned that economic risks remained on the downside.

At the start of the summer, Europe stood at the edge of the abyss.

ECB president Mario Draghi’s press conference yesterday turned out to be a damp squib, as he said little that would move the markets either way.

The Government is in negotiations with the troika about support mechanisms when the country exits the IMF/EU bailout programme at the end of 2013.

The IMF yesterday backed giving Greece and Spain more time to reduce their budget deficits, cautioning that cutting too far, too fast would do more harm than good.

The Outright Monetary Transactions (OMT) programme announced by the ECB last month will never be a replacement for primary market access, says the bank’s president Mario Draghi.

Central Bank governor Patrick Honohan expects the German Bundesbank to eventually row in behind ECB plans, unveiled yesterday, to make unlimited purchases of short-term bonds of stressed eurozone member states.

The Governor of the Central Bank Patrick Honohan has said Ireland could benefit from the ECB's decision to buy the bonds of troubled Eurozone countries.

The European Central Bank has unveiled its most ambitious plan yet to halt Europe's financial crisis with a pledge to buy unlimited amounts of the government bonds of countries struggling to manage their debts.