Just what is going on in Brussels? The financial crisis has taken on a whole new twist with Europe, seemingly attempting to bully Portugal and Ireland into accepting a bailout, even though their governments are funded well into Spring of 2011.

Right now, the picture is not clear. Ireland is insisting that it does not need help, but it is pumping huge amounts of taxpayers’ money into private banks which are struggling due to the burst of a property bubble which previously propped them up. In turn, Ireland has said that it will continue to pump money into them, but baulked at pressure from Europe to accept a bailout, arguing that it had plenty of cash to see it into the Spring of 2011.

By the time of this leading article going to print, Portugal was urging the Irish to “do the right thing for Europe” and accept the bailout. Portugal argues that Ireland’s declaration has sent jitters through the market, driving its borrowing costs through the roof. It said that in order to ensure the safety of the euro, Ireland needed to accept a bailout now, to calm the markets.

In theory, both are right. Why should Ireland accept a bailout, urged by Europe, just to calm the markets interest in European (Portuguese) bonds? It is a sovereign nation and it has its own laws and Constitution.

Ah, but on the other hand, it is a member of our great Democratic Experiment and it shares a currency with 16 other nations, ours included. If one of those countries goes bust… poof… there goes the euro and possibly the EU as we know it.

But where Europe has gone wrong here is that it has not told anyone, what on earth, is going on. Never in the history of fiscal policy has such a drastic U-turn maneuver been carried out. The ECB was an independent and aloof body that has transformed itself into a money lender and policy drafter. Now, the ECB has become the watchdog of the euro, as it pressures Ireland to take a ‘bailout’, to stop contagion in Portugal. Strange days indeed. Ireland argues that it does not need to take a bailout, because at present, it is ‘merely’ a country in debt, which has enough cash to cover payments for the next six months. Why should it?

Because Portugal does not want to be dragged in the mire, and it has lobbied with the ECB and Eurozone ministers; that’s why. The EU, the EC and the ECB do not want the madness to spread to even more countries, so they are backing Portugal. As the US saying goes, Ireland is expected to ‘take one for the team’.

In essence, we are back to square one. With all the powers bestowed on the EC to prevent a crisis from happening again, here we are just a few months later with another hot potato in our lap. Portugal tossed it to the ECB and now the ECB has tossed it to Ireland.

Ireland is currently juggling the potato, but… perhaps inevitably, it will accept it. But it will definitely depend on the topping that goes with it. Some sweeteners will definitely be thrown in and Ireland will take the cash. It’s reputation dented, it’s pride battered… Europe will definitely offer something they can’t refuse in return.