With the world’s attention on the travails of southern Europe, it’s perhaps easy to lose sight of how equally dire the situation is in Ireland, the lone north European member of the PIIGS economies.

The EIU’s latest financial services forecast for Ireland has been published at the parent site [subscription required]. “The outlook for the [financial] system is grim and subject to great uncertainty,” according to the report.

Crucially for the country’s lenders, the government is having trouble launching its “bad bank” plan to relieve beleaguered banks of sour loans. Heavily reliant of wholesale funding—and now, the soon-to-be-withdrawn emergency credit from the European Central Bank—Irish banks have little choice but to slash lending in order to shore up balance sheets. As a result, the EIU forecasts annual declines in bank credit for the next five years. The “Celtic tiger” will remain caged for some time to come.