Warning that "the sovereign crisis is not over", Dominique Strauss-Kahn, the IMF managing director and a likely French presidential candidate, called on the European Union to move responsibility for fiscal discipline and structural reform to a central body that is free from the influences of member states.
The proposal from so powerful a figure will dismay Ireland and other peripheral euro-zone nations already fearful of a loss of sovereignty as the price of a bail-out. Ireland is expected to agree a rescue of up to €100bn (£85bn) within days, in the form of a low-cost loan to shore up the banks.
The scale of Ireland's problems was laid bare on Friday by Allied Irish Banks, which revealed that it has lost €13bn of customer deposits – mostly "institutional and corporate" – since the start of the year, 17pc of its entire deposit base.
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