Crucially, some experts say the rescue may have come too late to save the next weak link, Portugal, from a similar fate. Ireland’s crisis also appears likely to force a speedy change its deeply unpopular government, calling into doubt the credibility of Prime Minister Brian Cowen’s four-year austerity plans.

Finance Minister Brian Lenihan said Ireland’s banks have become wholly dependent on loans from the European Central Bank and, just like the government, look likely to be frozen out of normal credit markets for at least a year.

Ireland’s banks invested aggressively in runaway property markets at home and abroad for a decade and were hit hard when the bubble burst. The estimated cost of bailing them out has been repeatedly raised beyond €50 billion — too big for the Irish to finance at a time when they were being pushed out of bond markets.

The shock of Ireland’s decision Sunday to seek a bailout, after weeks of denying it needed one, has proved too much for the country’s fragile government.

The junior member of the coalition, the environmentalist Green Party, stunned Cowen and his Fianna Fail party by announcing Monday they want parliament dissolved in January for an early election. A Green withdrawal would destroy Cowen’s three-vote parliamentary majority, which is essential to pass an emergency 2011 budget.

Green Party leader John Gormley said his party would support Cowen through that Dec. 7 vote — but expected Fianna Fail to concede the necessity that Ireland elect a new government with a strong majority in January.

Gormley said the Greens intended to do nothing to stop the 2011 budget, the related four-year plan, and the expected flow of EU-IMF money into Ireland in the coming weeks.

“Leaving the country without a government while these matters are unresolved would be very damaging and would breach our duty of care,” Gormley said. “But we have now reached a point where the Irish people need political certainty to take them beyond the coming two months.” Cowen’s office confirmed the prime minister was told of the Greens’ decision only minutes before the announcement.

The Greens’ six lawmakers since 2007 have propped up Fianna Fail, which has been hoping to cling to power until 2012.

Earlier, Lenihan stressed that Ireland has no plans to force senior bondholders of the five state-supported banks to absorb losses, as Germany insists will start to happen when new EU crisis-management rules are enacted in 2013.

“We’ve always acknowledged as a sovereign state that we pay our senior debt. I’ve not seen any push to have senior debt dishonored,” he said.

Europe’s stock markets and the euro initially rose in relief that a long-rumored bailout would finally happen, but reversed course in the afternoon as the focus switched to wider unresolved problems across the eurozone. The cost of borrowing for the most debt-burdened eurozone members — Portugal, Ireland, Italy, Greece and Spain — all dipped modestly on bond markets.

The stock of Ireland’s two healthiest banks plummeted in expectation of increased state involvement and forced mergers and disposal of assets. Ratings agency Moody’s said it expects soon to slash the credit ratings of Ireland by two or more notches — to just above junk-bond status.