Ireland passed the latest review of its EU-IMF bailout on Thursday but the real measure of success, a full return to market funding next year, looks increasingly difficult as slowing economic growth threatens its debt goals.
Ireland is trying to position itself as the first country to emerge from Europe's debt crisis and its success in cutting its budget deficit and shrinking its banks has meant glowing quarterly reviews by its paymasters at the EU, the ECB and the IMF have become routine over the past 12 months.
But future quarterly reviews may not be so stress-free if, as expected, Ireland has to downgrade yet again its growth forecasts for this year, raising the burden of its debt and potentially requiring additional aid from Brussels.
With no funding yet in place for 2014 and loans of around 24 billion euros required to cover government spending and a bond redemption that year, many analysts expect Ireland will ask Brussels for additional aid in 2013 under a so-called precautionary programme.
We'll be able to go back to the markets in 2013 but won't be able to raise the 24 billion euros we need for 2014 without external assistance, said Brian Devine, economist at NCB Stockbrokers.
The government are right to be upbeat about where yields have come from. But we still have a deficit of 10 percent, so there is clearly a huge gap still to be closed before we reach a sustainable debt level. Debts are still rising.
Finance Minister Michael Noonan is hoping to cut the country's debt burden by wrestling additional concessions from Europe on the cost of bailing out its banks but a deal, if possible, is months away.
Officials from the EC, the ECB and the IMF will complete a technical paper at the end of next month on cutting the cost of around 30 billion euros in effective IOUs issued to some Irish banks and it is then up to the finance ministers of all 27 European states to agree a deal.
Any changes that would have to be made in any of these things, would need the write-off, at the end of the day, of the representatives of the 27 countries, Noonan said.
Under its bailout, Ireland has vowed to radically shrink the size of its banks by the end of 2013 and Noonan said officials from its so-called troika of lenders had agreed that if this so-called deleveraging was hitting the flow of credit to the domestic economy then the pace of deleveraging could be eased in certain cases.
There is an agreement with the Troika that if the pace of deleveraging hinders the capacity of the Irish banks to lend as is required to get the economy going, then we will vary the pace of it, but it would be a matter for ongoing discussion, said Noonan.
Noonan also said that the next stress test of Irish bank balance sheets would be timed to coincide with the publication of European-wide stress tests in November. He said, however, that if the European stress tests were delayed Dublin would still publish its results that month.
Noonan also said a decision on the future of bancassurer Irish Life & Permanent would be made by the end of April. He signalled a wind-down of permanent tsb was not on the cards and its sale or merger with a larger bank was a more likely option.
The government still intends on selling Irish Life despite the collapse of a deal last year.
(Additional reporting by Carmel Crimmins and Conor Humphries; Writing by Carmel Crimmins; editing by Anna Willard)