What would happen if Ireland goes bankrupt?

Luckily so far my family has not been hit too badly by the recession. Hubby still has his job thank God.
However I can't help but wonder what the future holds for all of us. What would happen if Ireland goes bankrupt (or whatever it's called when a country can't pay it's bills).
How will day to day life be affected?

I assume you mean if the Govt decides not to repay its debts?

First of all, it wouldn't be able to borrow anymore.

So it would have to cut public spending by approx 10bn (more than the current cuts).

Or else introduce substantial increases in tax, to balance the Budget.


The banking system would also see an outflow of capital.