Ireland did not rule out the possibility that it may have to turn to Europe for help in dealing with its debt crisis on Sunday but said that no application had been made for assistance yet.

“Things are happening day by day,” Justice Minister Dermot Ahern told national broadcaster RTE’s “The Week in Politics” when asked if he would put his reputation on the line and say that Dublin would not apply for aid.

In an emailed statement, a spokesman for the Department of Finance said there were ongoing contacts with international colleagues “in light of current market conditions” but repeated that no application had been made for assistance.

EU sources over the past two days have said that talks on a possible bailout were under way and that Ireland, with borrowing costs rocketing, was unlikely to hold out without assistance.

The European Union is keen for Ireland to accept aid, sources have said, to avert a Greek-style scenario where budget problems in one country plunge the entire euro zone into crisis.

Ahern said reports Ireland was in aid talks were “fiction.”

“There are no negotiations going on. If there were, the government would be aware of it, and we are not aware of it,” he said in a script released by RTE, adding that he had spoken to Prime Minister Brian Cowen on Sunday and to Finance Minister Brian Lenihan.

Ireland would become the second euro zone country after Greece to obtain an international rescue but, earlier, another cabinet colleague said Ireland was not like Greece in that it was funded until mid-2011 and therefore did not need assistance.

“We have every confidence that we will be able to manage this economy,” the minister of enterprise, trade and innovation Batt O’Keeffe said. “It’s been a very hard-won sovereignty for this country and this government is not going to give over that sovereignty to anyone.”

He added that the International Monetary Fund had stated it believed Ireland could manage on its own.

Germany, the EU’s chief paymaster, said it was not exerting pressure on Ireland to accept aid.

EU sources said the range of aid under discussion was 45 billion-90 billion euros ($63 billion-$123 billion), depending on whether Ireland needed support for its banks, driven into debt by the financial crisis and a property market crash.

Such aid, if it were needed, could come from an initial EU bailout mechanism or from the 440 billion euro European Financial Stability Facility (EFSF) set up after Greece was forced to seek help in May.

PORTUGAL STILL UNDER SCRUTINY

One of the sources said Dublin was not keen on applying for emergency funding, but that it may not have a choice if it came under renewed attack in financial markets.

Ireland has blamed Germany for aggravating its woes by pushing the idea of asset value reductions or “haircuts” for private bondholders in a euro zone rescue mechanism from 2013, a move which sent spreads wider on bonds of euro zone peripheral nations.

German Chancellor Angela Merkel was quoted as saying at last week’s G20 meeting that markets must understand that politicians cannot keep asking taxpayers to pay for losses incurred by investors when markets turn against them.

Ireland’s borrowing costs shot to record highs in the past week on concerns about a deficit set to hit 32 percent of gross domestic product this year and worries private bondholders could be forced to take such “haircuts” on their holdings.

The focus on Ireland has not helped ease pressure elsewhere in the euro zone periphery.

The foreign minister of Portugal, seen by many investors as the next country that could need aid, said on Saturday that failure to adopt a broad coalition government to deal with the crisis may force the country out of the euro.

Greece’s prime minister said in an interview on Saturday that the possibility of extending repayment of its 110-billion-euro EU/IMF loan was up for discussion.

On Sunday, Greece was holding local elections that could complicate its deficit-cutting efforts.

Erik Nielsen, chief European economist at Goldman Sachs, wrote in a note on Sunday that the European Commission may be discussing a possible aid deal this weekend with Portugal, which has a smaller deficit but more acute funding needs than Ireland.

“In spite of their differences, if (when) Ireland or Portugal officially seeks help, it can only be in everyone’s interest to start the process for the other country at the same time,” he said in the note.