The British loan to bail out Ireland’s banks is again being mentioned in the media, here in the WSJ –
Moreover, as Cameron pointed out Thursday, a bilateral loan would likely require the government borrowing money to make available to the Irish, driving up already sky-high U.K. borrowing.
So how’s this? Cameron and Osborne suddenly finding they have access to significant and substantial extra funds to stop the financial world from falling into a new crisis by rescuing Ireland’s banks?
You might be forgiven for seeing the work of Foundation X involved here. This would be a way of saving Ireland’s banks without referring to the eurozone and the EU. It’s a resumption of sovereign states acting bilaterally, and not supranationally. It’s a sign that central banks that underlie the assumption of power by the EU, are tiring of the bureaucratic and corrupt behemoth they’ve had a hand in creating, and they prefer to work through London to set up a quicker and more effective rescue for Ireland.
This British loan might be sufficient to save Ireland’s membership of the Euro, but the political situation in Ireland will ultimately decide that. The Irish might note, however, that in their hour of greatest need and threat, the EU was effectively next to useless, and that it was an independent non-Euro government that was able and willing to provide the neighbourly help required. That in itself must have consequences.