"What they need to do is front load, front load, front load", Sweden's Finance Minister urged the Irish government.

• Sweden's economy continues to build up
• Sweden unemployment drops to 7.4 percent

BRUSSELS (AFP) - Europe's economy hit fresh turbulence Thursday when Ireland revealed a crippling record deficit and Spain suffered a credit downgrade, as euro partners pursued deep budget cuts despite a worker backlash.

Revealing the full horror of its financial crisis, Ireland said massive debts run up by Anglo Irish Bank could have brought the country to insolvency.

That resurrected the spectre of a collapse similar to that experienced in Greece or non-euro Iceland.

Ireland's central bank warned that a state rescue could cost as much as 34.3 billion euros (46.6 billion dollars) -- the country's annual taxation revenue -- and will help push its public deficit to a record 32 percent of gross domestic product this year.

That would be the largest deficit for a eurozone member since the European single currency was created in 1999 and comes amid mounting investor concern about soaring levels of eurozone state debt.

Ireland's debt would now climb to 98.6 percent of output this year, up from 64 percent at the end of 2009.

A day after protesters drove a cement mixer into the gates of the Irish parliament, Finance Minister Brian Lenihan insisted Ireland was coming to terms with the "nightmare."

He said he would deliver a new four-year budget plan in November.

European Central Bank president Jean-Claude Trichet welcomed the pledge as an "unequivocal commitment of Irish authorities to correct their excessive deficit."

Lenihan only joined talks in Brussels by conference call from Dublin, but Luxembourg premier and Eurogroup chief Jean-Claude Juncker said Ireland could beat the crisis without help from a trillion-dollar "umbrella" set up by the European Union and the International Monetary Fund.

The head of the European Financial Stability Facility, Klaus Regling, said the fund was "ready and available if needed," but stressed that his "central scenario" is that it "will not need to become operational."

Top EU competition regulator Joaquin Almunia welcomed "clarity" from Dublin over the size of state aid to troubled Irish banks, which junior minister Daa Callea in Brussels said brought "finality" to the saga.

He claimed "unanimous support" among counterparts, despite a demand from Sweden's Anders Borg that Ireland develop more specific plans for how to cut its massive budget deficit.

"What they need to do is front load, front load, front load," he said. "They are not concrete enough when it comes to fiscal measures that need to be done."