Irish Bank Debt and European Central Bank worries

The current Irish Debt crisis has created even higher level of borrowing by banks in the country from the European Central Bank, this after traditionally always being a net borrowing nation. Banks in Ireland have now borrowed about 130 billion euros from the European Community and this coupled with recent economic data suggesting a further reduction in consumer confidence and higher runs on the banks since the last quarter have left the European Central bank considerably worried and ready to put a cap on this arrangement. The Irish central banks guarantee on loans has still kept its rating in S&P at an 'A' even after the recent reduction and this is allowing Irish Banks to still borrow at low rates of discount. This situation is leading to a scenario where many risky debts are being financed by European loans leading to a scenario where the Irish Central Bank may not be able to guarantee all the loans that have been taken out, and thus according to some figures could lead to a 78 billion euro loss, an amount that would require recapitalization for the European Central Bank itself. This potential scenario of bad loans being payed for by foreign debt could very well cause a situation similar to the recent United States banking crisis and poses many problems for the Irish Central Bank as well the Euro community as a whole. These 'bad' debts are currently just shifting hands and this doesn't make them any more liable to be paid in the future.
The Irish Central Bank is also at a knife edge in its decision-making as its own foreign reserves are too weak to stem the problem, it doesn't have the authority to print its major trading currency the European Euro either, and finally it is also fast reaching maximum limits of taxpayer burdens the country can tolerate.
This leads to scenario where borrowing from external sources has become the only alternative; one that is increasingly coming under scrutiny of late. The fact that 10 billion euros worth of bank funds have been transferred out of the country in the third quarter of this year along with other demoralizing Irish financial indicators leads to a further problem of a run on the banks thus further compounding this already imminent threat of default. The central bank in the country is in dire need to come up with innovative solutions to this problem and will need to tackle the issue at hand aggressively if the economy is to be kept afloat and with it the economic stability of lender nations.