Playing the long game
So the Irish bail-out has been signed off. Ireland has its massive loans.
European ministers have headed for the microphones today to proclaim the euro has been saved.
German finance minister Wolfgang Schaeuble described the deal as "a big success for Europe".
Certainly it has bought some time.
Ireland like Greece before it has been given a respite from the unforgiving glare of investors and the bond markets. With the announcement of a permanent mechanism to handle future crises some uncertainty has been removed. Investors could share in losses after 2013 but only if a country is declared insolvent.
The prospect of a more immediate hair-cut has been dispelled.
But here's the question: does this latest bail-out actually address the underlying problems?Take Greece which has been in the lifeboat longer.
At the time of the bail-out its total debts were in the region of 300bn euros. Since then it has drawn on several tranches from the 110bn euro bail-out fund. These are intended as loans so they add to the total debts.
In the meantime the Greek economy is contracting. In the third quarter, GDP actually shrank by 4.7%. And public spending is being reduced further.
Cuts of 9bn euros had been announced earlier. Then it was discovered that the budget deficit was higher than first thought. So the government said it would reduce spending by a further 4bn euros.
While Athens is having some success in reducing its deficit it is struggling to increase tax revenues.
In May, when Greece was bailed out, the rescue package was for three years until 2013.
At the time some asked 'what would happen then?'
The markets did the sums. The conclusion was that Greece might just succeed in reducing its deficit but its debt mountain most probably would have risen.
So Greece would have been given 'time-out' by the bail-out but when it returned to the field of play it would be back where it started.
Scroll forward to yesterday and the Irish bail-out. Slipped in quietly was the news that maturities of the Greek bail-out loan would be extended.
The Greek government had been pushing for it and almost everyone expected it.
Confronting the reality of the giant black hole of debt has been pushed further into the future.
Which brings us to the Irish Republic - and its 85bn euro bail out. 45bn euros comes from the EU including bilateral loans from Britain; 22bn will come from the IMF. 17.5bn euros will have to come from Ireland itself.
In an unforseen twist, the Irish government will have to use billions of taxpayers' money to save itself.
The billions come from . Some are saying that, until recently, it would have been illegal to raid this pension fund to cover current expenditure.
In Ireland's political debate
There is an optimistic scenario. Ireland has been given the chance - once and for all - to sort out its banks (they will be fewer and leaner in the future).
It has immediate funds to bolster the reserves of its banks. The government will have no immediate funding problems. It will be spared from having to finance its debts at the very steep rates asked by the markets.
It is committed to 15bn euros in cuts and tax increases over the next four years to bring its deficit down.
The EU yesterday granted it another year - until 2015 - to reached the figure of 3% as demanded by the Growth and Stability Pact.
Its unit labour costs have fallen and its exports are growing by 7%. Manufacturing output is also up. The government predicts growth of 2.7% over the next four years. So Ireland is reborn and over the next 7 years repays its loans and begins paring down its accumulated debt.
But there is another scenario. Ireland has ratcheted up its debts already in absorbing the billions of losses from the banking sector.
They are real losses. Property prices are still falling, so rock-bottom may not have been reached.
More homeowners may default. Ireland is now in the process of drawing on another 67 billion euros in loans with lenders - like British Chancellor George Osborne - pointing out yesterday that he expects to get the money back.
So Ireland's debt mountain will grow. Its economy has already shrunk by 15%.
And here's the dilemma.
Ireland is a country of under five million people. It has taken on a massive loan at a rate of 5.8%. How will it afford to pay it back the interest and pay off the earlier debts?
Growth may return to Ireland sooner than Greece, but while Europe's politicians declare the euro has been protected the reality for countries like Greece and Ireland is years of increasing debt and austerity.
Europe's leaders, who have recently added a tone of desperation in their comments about the euro's future, have taken refuge in the long game while hoping that something turns up that enables countries such as Ireland and Greece to reduce their debts.
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