Eurozone seeks way out of Irish debt crisis

"Unless the EU changes track and agrees to make the EFSF (rescue fund) permanent and the ECB steps up its purchases of the hard-hit countries' government bonds, investors will believe that default is inevitable and demand correspondingly punitive interest rates," said Simon Tilford, chief economist at the London-based Centre for European Reform. "Contagion to other member-states will be all but inevitable. If, and when, it reaches Spain, the crisis risks spiralling out of control," he said.