Ireland Bailout Threatens European Monetary Union

This is the big story from Europe, at WSJ, "Irish Grasp at EU, IMF Lifeline":

The Irish government all but buckled to pressure to accept a historic international bailout Thursday, capitulating after a week of intense lobbying from officials across Europe and spurring questions about which other European economies will need a helping hand. Ireland's central-bank governor and finance minister acknowledged for the first time Thursday that the country needs help rescuing its banking industry, which has been crippled by losses on sour loans.

The Irish government is in talks with the International Monetary Fund and European officials about a loan package that is likely to amount to "tens of billions" of euros, the central-bank governor, Patrick Honohan, said. "It will be a large loan because the purpose...is to show Ireland has sufficient firepower to deal with any concerns of the market."

Ireland's grudging decision to accept foreign aid, after insisting it didn't need help, is a bitter moment for a country that won its independence from Britain decades ago. Already, some lawmakers and editorial writers are bemoaning what they see as the inevitable loss of sovereignty that will accompany a foreign bailout.

And this is key, in my opinion:

It is an equally pivotal point for the 16 nations that use Europe's common currency. After rescuing Greece in the spring, European leaders are now betting that if they extinguish the financial crisis engulfing Ireland, it won't spread to other euro-zone weak spots. But with bond markets continuing to punish those countries, new bailouts may be needed soon—a prospect that some believe will call into question the durability of the euro as a common currency.

I reported some time back that Germany's economic resurgence was lapping many other EU nations, and the prospect of renew demands for German autonomy outside the political union was said to threaten European integration. (And at NYT, "German Identity, Long Dormant, Reasserts Itself.")

RELATED: At The Other McCain earlier this week, "EUROPE IN CRISIS: Sudden Financial Emergency Strikes EU Zone UPDATE: Götterdämmerung?"