Finance ministers from the 16-nation euro zone are due to meet in Brussels from to discuss the emergency loan package Ireland needs to stem mounting losses at its banks and cope with a massive budget deficit.

Ministers from the broader 27-nation European Union will also gather to approve the aid, which will come from a euro750 billion rescue facility the bloc set up back in May after Greece was pushed to the brink.

By committing funds for Ireland, Europe hopes to draw a line under a crisis that has severely dented confidence in the 12-year old currency bloc.

But investors could soon turn their attention to other high-deficit countries like Portugal or Spain in what is turning into a high-stakes showdown between markets and politicians.