The situation in a nutshell is this:

• Ireland has a debt crisis (who doesn't these days?) including huge problems with its Banking system and may need to tap into an EU/IMF 750E billion rescue fund, designed to prevent Sovereign default.
• A rescue would be somewhat humiliating for Ireland so the Irish Government has been trying to avoid it at all costs but the markets have got impatient, seeing some kind of aid package as almost inevitable but not happening
• This situation has been bubbling around for a while now but the Irish inactivity in this area has  prompted a substantial money market sell off yesterday and the dreaded word "contagion" is back as once again the debt situations of Greece, Spain and Portugal are brought back into focus
• These countries, as well as all the other Eurozone members would like this resolved as soon as possible as market forces will make it more expensive for them to raise funds while there is a possibility of default but that is why the rescue package was created in the first place. Countries raise funds through the Bond markets but if there is a risk of default, do you want to be holding Irish Bonds ?so they pay more for their funds, adding to the debt problems

Money markets will be volatile and the Euro will be very weak until this is resolved but lessons will have been learned from the past in avoiding a full blown crisis - you would have thought!