New Irish Government Seeks Bailout Changes; EU Considers Lower Rates

"Pricing policy, I am referring to the interest rates, is one key issue here which will be discussed in the context of the comprehensive strategy of the European Union," Rehn said. "I expect that this issue of pricing policy will be looked at from the overall European perspective of safeguarding financial stability in the euro area and ensuring debt sustainability of all its members."

While an interest rate cut would be a symbolic victory for the new ruling coalition, it wouldn't do much toward offsetting the nation's debt level. Of more value would be compelling bondholders to shoulder some of the losses from Irish banks. To this, however, the European Central Bank (ECB) is firmly opposed, fearing that such a measure will lead to contagion of the debt crisis. Kenny, however, may push for it regardless. The danger is that in exchange, Europe may insist that Ireland raise its corporate tax rate, which it views as hindering competition.