Ireland’s economic difficulties have received wide coverage in the German media and regular mentions from politicians.

Finance minister Peer Steinbrück put a cat among the pigeons last March with a claim that Ireland was in a "very difficult situation". Officials said later the minister was talking hypothetically.

Journalists have done each other with grim reports from Dublin and Limerick on the "collapse of the economic wonderland".

Images of dole queues and burnt-out cars and houses predominate, as do anecdotes of Germans who have seen their Irish dream end in redundancy.

The widespread view here is that Ireland hopes for a Berlin bail-out to rescue the same banks it lured over in the last two decades with bargain basement corporate tax.

Officials in Berlin say they are watching closely the trimming of public expenditure while, in Frankfurt, traders talk of "slack business" in Irish bonds.

The 2007 near-collapse of the Dublin-based subsidiary of the state Sachsen Landesbank has proven to be just the warm-up act for the drama around Dublin-based bank Depfa.

Since last autumn, Berlin has given Munich-based Hypo Real Estate (HRE) property group €102 billion loans and guarantees because of severe liquidity problems attributed to its Dublin-based subsidiary.

The loans have annoyed cash-strapped German politicians and infuriated the financial regulator BaFin.

In their analysis, Germany did Ireland a €102 billion favour by bailing out what they see as an Irish-based bank and responsibility of the Irish regulator.

BaFin energetically rejects suggestions from Dublin that, as a subsidiary of a German company, the German is responsible for bail-outs.

"I'd like to see what regulation or law the Irish think proves that," exclaimed one BaFin official recently. "This was an Irish bank needing an Irish rescue."

Yesterday, a parliamentary committee met for the first time to investigate the circumstances of the near-collapse of HRE/Depfa.