European Central Bank Vice President Vitor Constancio has said aid would be available for Ireland, whether it was for its banks or the State.

At a news conference in Vienna, Mr Constancio confirmed talks were under way on the issue, but that Ireland has not made any formal request for help.

The Portuguese Central Bank Governor said talks had been going on with other countries too, but that so far there have been no formal requests for aid.

He said that according to the European Financial Stability Facility's rules, loans cannot be made directly to banks.

Instead, the facility lends to governments, who earmark a certain amount of the funding for financial institutions.

Mr Constancio acknowledged that Ireland is financed until the middle of next year, but he said solutions 'have to be pondered' for the banks, which he said are at the centre of Ireland's problems.

EU seeks 'quick' solution

Earlier, the Austrian Central Bank Governor and ECB policymaker, Ewald Nowotny, said he did not expect Ireland's problem to spread to Spain and Portugal, but that the EU wants a 'quick, good' solution to Ireland.

However, a source at the European Financial Stabilisation Facility told RTÉ News the special EU bailout facility could not be used directly to support a country's banks.

However, a segment of any bailout could go to help the banking sector as long as the amount was declared and politically agreed 'up front' as part of a larger package going to support a member state.

The source drew attention to the one-off €110bn Greek rescue package agreed last May. On that occasion €10bn was set aside for the Greek banking sector.

The amount was fully agreed and politically cleared as part of the country programme agreed between Greece, the EU and the International Monetary Fund.

Portuguese, Greek problems

Meanwhile, Portugal's Finance Minister has said his country is at high-risk of needing a bailout due to the danger of contagion from other debt-hit euro nations.

'The risk is high because we are not facing only a national or country problem,' the Financial Times website quoted Fernando Teixeira dos Santos as saying in reference to the possibility that Lisbon will need international financial assistance.

'It is the problems of Greece, Portugal and Ireland. This is not a problem of only this country,' he added.

Earlier, Greek Prime Minister George Papandreou warned that the tough stance taken by Germany on banks and bond markets sharing the pain of any eurozone debt default could force some economies towards bankruptcy.

He was speaking as new figures from the EU indicated that Greece's budget deficit is worse than had been thought.

EU and International Monetary Fund officials are in Athens to decide whether Greece should receive a third tranche of a rescue package.

Elsewhere, European Central Bank policy maker Axel Weber said that banks must be allowed to fold and backed the idea of issuing special bonds that would automatically convert to equity in the event of a crisis.

He was speaking at the opening of Euro Finance Week, which is expected to see bankers and policymakers clash over how far to go with new regulation.