Pity the Irish. In the past 18 months, Dublin has repeatedly unveiled commendably bold measures to fight financial crisis. First, it offered to guarantee the banks. Then it replaced its top regulator and central bank governor, and embarked on an unusually forceful effort to inject transparency into its troubled banks.

More remarkable still, it has also imposed a painful austerity plan, in a bid to reduce debt. This has hitherto been largely accepted by long-suffering voters; social cohesion still appears surprisingly high.

Yet, instead of being rewarded by the markets, Ireland is now in the cross-hairs. Ten-year government bond yields have just surged above 8 per cent. Hedge funds in places such as New York are forecasting a default. And, on a visit to Dublin this week, I bumped into several distressed debt experts, some of whom joked that “Ireland is now even worse than Greece”. And not just because of the weather.