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There is a large body of research showing a correlation between excessive leverage and failure of banks like Dexia, the Franco-Belgian institution that required a second bailout in 2011.
And Ireland has kept up its part of the bargain — unlike Greece, which required a second bailout and continues to struggle to satisfy its international lenders that it has exercised enough budget discipline to merit its next loan installment of €31.5 billion, or $40.7 billion, to avoid defaulting by the end of next month.
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A week after slashing Portugal's status, Moody's cut Ireland's credit rating to junk and warned that the country would be likely to require a second bailout.
Dublin is trying to distance itself from the woes of euro zone struggler Greece, which is trying to avoid a potentially devastating default and seems certain to require a second bailout to plug a looming funding gap.
The Greek prime minister Lucas Papademos has conceded that the crisis-plagued country could require a third bailout only weeks after it secured a second package of rescue funds following months of hand-wringing in Brussels.
Irish voters would probably approve their country's participation in a euro zone fiscal discipline pact, approval that would be required were Ireland itself to need a second bailout.
If savers start to wonder whether deposits in any of the eurozone states that may require a bailout are safe, there could be runs in Greece – already in need of a second bailout – as well as in Italy and Spain.
Varoufakis conceded for the first time that Greece might require a third eurozone bailout if and when the present programme concluded, as scheduled, by the end of June.
"Markets will certainly ask the question about whether a second bailout might be required and the margin for error between the sort of €40bn the IMF is saying and the €100bn ceiling," said Mark Miller of Capital Economics.
Greece succeeded in getting a second bailout.
A second bailout looks more likely...
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