Ireland’s A Gonner

Sometimes it takes an outsider to see things clearly.  The debts of Ireland’s nationalised banks are five times Irish GDP.  The country’s austerity programme is already severe but is still not nearly enough to bring the government’s finances back into shape.
There is only one outcome possible from here.  The EU are in denial.  They will delay and defer as long as they can.  But each delay merely worsens and prolongs the depression in Ireland, which is sending the Taoiseach, Brian Cowen, into a state of near mental collapse, as a recent radio broadcast revealed, where he seemed to be losing it completely. 
This American writer sums it up today in the FT 
one must expect that European policymakers will try to paper over Ireland’s solvency problems with a heavy dose of IMF-EU financing. This might buy useful breathing room for a European banking system overexposed to its periphery. But it would hardly be in Ireland’s best interest since, in the absence of debt restructuring and of a euro exit, IMF-imposed austerity runs the real risk of plunging Ireland deeper into depression and deflation.

If it is indeed inevitable that, in the end, Ireland will be forced to renege on its government’s debt obligations and to exit the euro, from an Irish perspective it is better that it be done quickly without pointlessly prolonging pain and saddling the country with a mountain of official debt. For at least that route might offer Ireland some prospect of recovering from its present economic depression.
The writer is a resident fellow at the American Enterprise Institute


The Tap Blog is a collective of like-minded researchers and writers who’ve joined forces to distribute information and voice opinions avoided by the world’s media.

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