Dear Reader, I feel I owe an apology.
I’m aware that I have written a lot in recent weeks on the economic situation in the Republic of Ireland. So if you’re not all that interested in economics, or Ireland for that matter, then I must say sorry. I realise some of you come here just for my extraordinary wit and others for my amazing insight and still others because you’re looking for an american sports journalist who shares my name. So, sorry if the EU bailout of Ireland isn’t your thing.
However, I’m obviously not sorry enough because this is one more post about it to add to my growing collection. Over the weekend, the EU finance ministers agreed a provisional bailout of the Irish government. Very provisional seeing as there’ll be a new government at some point in the early new year, and that government will be wanting to re-open negotiations over the bailout.
So for a few weeks, Ireland is out of trouble with a bit of breathing space to get back on its feet. Except it won’t get back
on it’s feet. Or if it does, it’ll get knocked straight back off them in a month or so. Because this deal does nothing. This deal is a loan to Ireland at 5.6% interest, which Ireland just can’t afford. Such a price means that in 5 years, 20% of all Irish tax revenue will be going towards those interest payments. That’s 1 in every 5 of the rather tarnished Euros that will be collected from an increasingly poor population.
The Euro market had a little bounce back this morning as expected, but that won’t last. In May, the Greek bailout was the end of the Euro crisis. A line in the sand not to be crossed again. Six months down the line and Ireland is reduced to penury and indigence. Portugal won’t get six months.
The endgame for Ireland will come when, after many many months of her people suffering from cuts, rising taxes and huge mortgage debts, Eire will renege on the debts owed to the rest of the EU, including the UK, and then the economic edifice comes crumbling down, leaving the rich nations to refinance the banks and refloat the world’s economy. In the mean time, the Irish people will flee their nation or suffer the consequences of the actions of their banks and government.