Tánaiste Eamon Gilmore has said that any solution arrived at to deal with the banking situation in Spain may not be applicable to Ireland.
Speaking in the Dáil, Mr Gilmore said that the Government is proceeding, at various levels, with efforts to secure a deal to ease the burden of bank debt on the Irish taxpayer.
These included talks with the Troika, the European Commission, the European Central Bank, and with various European leaders.
Mr Gilmore said that there may be a possibility of a Europe-wide solution to bank debt generally, and that Ireland is also watching to see how the banking crisis in Spain is managed.
"It may be that there will be a solution to the Spanish problem which is translatable to Ireland.
“However we do have to be careful that we don't hang our hat entirely on the Spanish situation, because what may be done in respect of Spain or what may be applicable in respect of Spain, may not be directly applicable to Ireland.
“We have to make sure that we have an arrangement which is suitable to the Irish situation."
Earlier today, German Chancellor Angela Merkel said she would work towards a reinforced political union in Europe with willing partner countries even if that meant a two-speed approach.
"We need more Europe ... a budget union ... and we need a political union first and foremost," Dr Merkel told German public television.
"We must, step by step, cede responsibilities to Europe. We must not remain immobile because one country or another does not want to follow yet."
Yesterday, Dr Merkel discussed the crisis with US President Barack Obama and Italian Prime Minister Mario Monti in the latest in a series of calls with global leaders.
British Prime Minister David Cameron also yesterday called on Europe to come up with an "immediate plan" to resolve the eurozone crisis.
Mr Cameron will meet Dr Merkel for further talks in Germany later today.
European Union leaders will discuss the crisis at a 28-29 June summit in Brussels.
However Dr Merkel told German television that not all of the bloc's problems could be solved with one summit meeting.
She said she did not believe "that one summit is capable of settling everything in one fell swoop."
What she wanted to do at the summit was to propose a framework for getting to a stronger political union, she added.
She explained again how she felt Europe could spur growth to help governments pay down their massive debts and reduce public deficits.
"Budget consolidation and growth are two sides of the same coin," she said.
Sustainable growth could only come from boosting the competitive positions of all EU members, Germany's leader added.
"We must, in each European country, confront our respective weaknesses," Dr Merkel said.
The current focus of the debt crisis is on the Spanish banking sector, and Finance Minister Luis De Guindos said yesterday that Madrid would decide how to fill a massive hole in the banks' finances within two weeks.
Madrid must come up with €80bn for bank recapitalisations in the midst of a deep recession brought on by the bursting of a Spanish real-estate bubble.
The International Monetary Fund is to report on the state of Spain's banks on 11 June, with separate studies by outside consultants including the world's biggest firms of auditors also due over the following week and months.
Govt to look for opportunities
The Minister of State for European Affairs has said the Government will be looking "to take full advantage" of any opportunities which might arise to reduce the size of Ireland's sovereign debt.
Lucinda Creighton was responding to speculation in recent days that the European Stability Mechanism could be used to lend money directly to troubled Spanish banks, meaning it would not become part of that country's sovereign debt.
Minister Creighton said in such an instance, the Government would "certainly" be looking for relief retrospectively, so that some of the banking debt could be moved from Ireland's sovereign debt. She described this as being an "ideal outcome" for Ireland.
However Ms Creighton added that it was too early to say "what the plan might be" and that the ESM option was only one of a number being discussed.
She said the EU first needed to "to get the bottom" of Spain's banking crisis and to establish their liabilities.
