Reproduced with permission from Business Insider.

Tinfoil hat time, courtesy of reader Brendan Moroney who writes in, speculating that Ireland has found a loophole that explains why there’s not been a bailout yet, and why the rest of Europe is so eager to have it take a bailout:

The Government of Ireland may have identified a legal loop-hole in the Euro support agreement put together for the occasion of the Greek Bailout back in May 2010.

This loop-hole has allowed Ireland’s banks access billions of Euros of funding from the ECB over the past few weeks (Sept. 2010 to present), without the ECB having the power to force any of it’s structural change on to Ireland.

Realising too late what is possible under the agreement, European’s financial leader are falling over themselves to pressure Ireland’s Government to cease subverting the support mechanism in such a manner and instead to row-in behind the spirit of the agreement. Hence the pressure over the past week-end for Ireland to access funding directly.

The ECB, never intend itself to be a no-strings-attached clearing house for Irish banking obligations.

The Government of Ireland has withdrawn from the bond market during this same time-frame. Budget figures have been announced for 2011 and Irish banks are availing of agreed support from the ECB.

It is the European Central Bank that is in uncharted waters and feels suddenly that it has lost control. What it intended to be a stability pact has emerged as a de-stabalising pact where a country with 1% of the economy of Europe is eating 15% of the funding of Europe.

Until Euopean leader have the opportunity to reform this recent agreement, the Euro seems to be the hostage of Ireland.

This basically makes sense, and it dovetails nicely with what Channel 4 econ reporter Faisal Islam tweeted earlier, that per his sources, most of the pro-bailout pressure was coming from the ECB, rather than Berlin.

Reproduced with permission from BusinessInsider.com.