The Irish government may be forced into a firesale of prized assets to raise billions of euros to repay its debts.
Its 25% stake in Aer Lingus worth €150 million (£128m) may be sold once the country’s economic affairs are managed by the International Monetary Fund and the EU.
Government stakes in the Republic’s electricity board (ESB), gas board (Bord Gais) and the National Lottery licence may also be sacrificed to raise billions.
Senior markets figures are also speculating that the IMF will take the unprecedented step of asking the Irish government to put up the semi-state companies or the money in the pension reserve fund as security for any loans they provide.
Normally IMF loans only go to poorer, developing countries with no security, but senior figures in the markets believe the IMF may this time demand security because Ireland is a wealthier country than most IMF-assisted economies.
The IMF are set to drive a harder than usual bargain to send out a message to other advanced economies not to let their finances get in so much trouble.
Ciaran O'Hagan, a senior bond expert at Societe Generale, one of France's biggest banks, said: “When a developing country is given aid, we can understand why no security is required. Not so when a government has access to reserves, investments and state holdings.”
If security was provided, the IMF could take ownership of Irish assets if it was unable to repay all its IMF loans on time.
The IMF could not be reached for comment yesterday on whether extra conditions would be included in the rescue package.
A review group is finalising its examination of 28 state-owned companies, valued at about €15bn (£12.8bn). Its findings will be used to begin the biggest shake-up of semi-state companies for decades.