|The eurozone crisis threatens EU survival, Van Rompuy said ahead of a meeting of finance ministers [EPA]
The European Union will not survive if it fails to overcome a debt crisis plaguing the euro single currency area, the bloc's president Herman Van Rompuy has said.
Van Rompuy said that the EU and eurozone were in danger from alarm in the financial markets, just hours before finance ministers met in Brussels, the Belgian capital, on Tuesday.
The meeting, expected to continue late into the night, was called to grapple with an exploding debt crisis that has already brought Greece to its knees, and now threatens Ireland and Portugal.
"We all have to work together in order to survive with the eurozone, because if we don't survive with the eurozone we will not survive with the European Union," Van Rompuy said in a speech.
He said he was "very confident" the EU would overcome the crisis, thanks to "courageous measures" taken by states "to reduce expenses at a time of populism, despite massive protests on the street and knowing they risk electoral defeat."
Van Rompuy's stark warning raises the stakes after an admission by Ireland that it was holding talks about a possible rescue, six months after international partners had to rush to aid Greece with a $150bn bailout.
Ireland said it was discussing stabilisation measures with its European partners on Tuesday and ways to cut its heavily indebted banks' funding costs.
"This is not a matter of the survival of the euro, this is a very serious problem in the banking sector of Ireland"
European Economic Affairs Commissioner
Brian Cowen, the country's prime minister, sought to reassure the public, saying the government was fully funded until mid-2011, and that it was only the banks may need help.
"What we are doing is discussing with our European partners as to what stabilisation [measures are] ... necessary," he told parliament on Tuesday.
Olli Rehn, the European Economic Affairs Commissioner, said that leaders were all working on ways "to resolve the problems of the Irish banking sector".
He added that the shared euro currency wasn't itself at stake.
"This is not a matter of the survival of the euro, this is a very serious problem in the banking sector of Ireland," Rehn said.
Nazanine Moshiri, Al Jazeera's reporter in Brussels, said eurozone ministers appeared to be "waiting for a signal from Ireland".
"I spoke to the Belgian finance minister and he said they are expecting that Ireland will ask for a cash injection.
"He said it's absolutely necessary to shore up confidence. He, like many eurozone ministers is concerned, about the impact this could have on other countries."
There are fears that Ireland's market turmoil could trigger a domino effect that could topple other vulnerable nations like Portugal.
Portugal has warned that it is at "high" risk of needing financial support, unable to borrow money on open markets other than at prohibitive rates, partly because tension over Ireland is increasing pressure on other weak eurozone members.
George Papandreou, the Greek prime minister, also facing new problems over conditions attached to the rescue for Greece, has said he has support from Nicolas Sarkozy, the French president, to re-schedule bailout repayments.
The three countries are only the weakest links in a chain of debt coursing through the 16 nations that share the euro currency, with almost every other member of the European Union bursting at fiscal seams.
Steps to normalisation
Analysts expect the ECB to announce "further steps towards normalisation of its money market operations" at the start of December, Callow added.
Ireland's public deficit this year is set to pass 30 per cent of GDP, 10 times the permitted EU limit and double last year's Greek deficit.
Its plight - which stems from Irish banks' massive over-exposure to busted property markets - is causing consternation among those who would have to guarantee rescue loans.
While drawing up massive new spending cuts to be announced within weeks, Ireland has sought desperately to resist the onslaught from euro doubters.
Experts say Dublin will need about $95bn, and Jean-Claude Juncker, the Eurogroup head, along with the ECB, the European Commission and the International Monetary Fund each say they are ready to act "as soon as possible" if asked.
Others are feeling the heat - with Spain also under pressure going into a bond sale on Tuesday.
Twenty-four of the EU's 27 states are currently running deficits way above EU limits. Bond yields for Ireland, Portugal and Greece all remain high.
The speculation is hurting the euro, which may be a minor blessing in disguise for exporters, and markets will again be watched closely over the course of the day.
Europe's top stock markets fell at the start of trading on Tuesday, with London's benchmark FTSE 100 index, Frankfurt's DAX 30 and the Paris CAC 40 each shedding value.
Source: Al Jazeera and agencies