A sign of things to come? Klaus Regling and former IMF expert Max Watson arriving at Department of Finance last June

How would finance minister Brian Lenihan apply for the bailout?

The rules say that a country like Ireland calls up the finance ministers of the Euro Group – the 16 finance ministers of the countries that share the euro. Lenihan would likely phone first an official at the technical level of the Euro Group.

What would happen next?

A dust bowl of officials would jet into Dublin from Brussels, Frankfurt and possibly Washington too, as the EC, the European Central Bank and the IMF (probably Europe-based staff of the US fund) descend on the Department of Finance on Merrion Street. The IMF is guaranteed a part of the action because it's paying about a third of the share of Klaus Regling's €440bn European Financial Stability Facility in Luxembourg. Collectively, the scores of staff and experts are called 'the country mission' and it is they who would go through the books on Merrion Street. Their job would beto see what reforms are necessary. They want their bailout cash to be repaid – and it would have to be repaid at an additional cost.

The aid is only given under strict conditions – taxes and spending cuts and so-called structural reforms would be implemented (which translates into the taking out of hefty chunks of the public service). The country mission would then put its findings into a 'country programme' which is presented to the Euro Group in Brussels and the IMF board in Washington. All 16 finance ministers have to sign up (Lenihan, as one of the 16, would presumably vote in favour) for the cheque to be posted to Dublin.

How long would this take?

It would be the first time that the Luxembourg cash has been tapped but, going by the experience of Hungary and Iceland, which received joint aid from the EU and IMF, the country programme could be drawn up and approved in three or four weeks.

Could it be done more quickly under severe distress – if, say, a big sovereign bond debt falls due?

The Greek experience is the blueprint. Athens for its own special three-year facility, which remains separate from the Luxembourg fund, needed to find about €20bn in quick time last May to pay back a big sovereign debt that needed redeeming. The Greek finance ministry had the bailout money in the coffers with two days to spare.

Would that be it, so?

The month-long accounting trawl would be followed by the signing of 'a memorandum of understanding' – a legal document – between the EC and Ireland. After that, the Euro Group of finance ministers would give permission to Regling's European Financial Stability Facility in Luxembourg to raise money for Ireland by issuing a special bond debt that investors can buy.

In a sign that the German taxpayer is still guaranteeing the lion's share of our national debts, it would be the German Finance Agency (the equivalent of our NTMA) that would issue the bond debt paper for Ireland on behalf of Regling's fund. The bonds have yet to be named because the Luxembourg facility cannot do any pre-funding.

Pricing the bonds – that's the annual interest rate at which Ireland would have to pay back the bailout cash – is where it starts getting costly for Ireland. The bonds would be priced starting with the annual market interest rate Germany currently pays to borrow for three or four years. Add on the retail and surcharge costs that would fall Ireland's way and the rate could rise to a hefty penal rate for Ireland taking the bailout cash.

What would be the likely rate?

The Greeks pay an annual interest rate of about 5% for their special bailout cash for three years. A Financial Times columnist frightened everyone when he wrote a few weeks ago that Ireland would have to pay an impossibly high rate of over 7%. But the noise since coming out of Brussels is that the rate would indeed be closer to the 5% Greece is paying for its cash over three years. That would be cheaper than Ireland's indicative current market rate of over 7.5% to borrow money for three years but is still a hugely expensive rate (the Irish 10-year rate reached a peak of 9.2% at one stage last week). As the Sunday Tribune wrote last month, there is no such thing as a free bailout. The cash, comparable to the Greek model, would be paid across to Dublin in quarterly tranches as long as Ireland followed the agreed country programme. The Luxembourg bonds issued by the German Debt Agency are bought by investors.

Could Ireland tap someone else's cash?

Regling's facility is only one source of bailout money. The EC has a second pot with up to €60bn available for troubled eurozone members. It would be a political decision between Europe and the US on how the bailout to a small country such as Ireland should be funded. (Our national debts carry a huge significance for Europe and the world way beyond their size.) Ireland may even take small shares from three potentially available pots – Luxembourg, the EC, and the IMF.

How many staff does Regling's Luxembourg facility have?

It's housed on half a floor of what is described as a "fairly basic" office block and has about 10 staff on its payroll.

And who monitors Ireland if it were to tap this and/or other facilities?

Keeping an eye on the finance officials in Dublin would be experts from the EC and the IMF based in Dublin. Regling has repeatedly said that his Luxembourg facility was only set up as a temporary safety net and would never be used.

But Ireland, unfortunately, may be the first to test that prediction.

10 reasons the markets don't believe us

1. Angela Merkel is seeking to save German and French taxpayers from paying for Greek, Irish and Portuguese debt.

2. The banks are running rings around the government – even still.

3. The total cost of bailing out the banks – €50bn and rising – is not yet certain.

4. The government is threatening to do more damage to the economy with its handling of the crisis.

5. Mishandling means that more than €15bn will be needed in future budgets.

6. Cutting our budget deficit to 3% of GDP by 2014 is impossible.

7. Stating that we have opted out of
bond markets is untrue – we have
been kicked out.

8. Public-service reform has not occurred and the cost continues to be enormous.

9. The mortgage default situation as was outlined last week is likely to increase over the next four years.

10. Trust has been eroded – those who presided over the crisis cannot be the solution.