Thursday, September 30, 2010

The luck of the Irish

Apparently all bad as this little stunner has emerged.

The Irish Central Bank has said it will need to increase the amount of support to the country's banking sector.
The total amount has risen to 45bn euros (£39bn), or 32% of the country's gross domestic product (GDP).
The Bank said supporting Anglo Irish Bank alone would cost from 29.3bn euros to a "stress scenario" bail-out of up to 34bn euros (£29.2bn).
The finance minister, Brian Lenihan, says it is "manageable". Without the bank support, the deficit would be 12%.
In comparison, the UK's deficit - including the cost of its bank support - is just over 10% of GDP for this year.
Last month, the cost of the bail-out of Anglo Irish was estimated at between 22-25bn euros.
32% of GDP is an incredible amount to have to pay back, it means the Irish state is in a terrible position and may have to default on some of the loans it has. Certainly there may be a need to bring in the IMF. The problem is of course that because of global markets, these things don't happen in isolation, what affects Ireland, affects the EU and will affect the UK. If the EU (as is feared it will) steps in to assist the Irish, then they'll look to find the money to do so from somewhere, they're already assisting the Greeks and if the Irish situation gets out of hand well out will come the begging bowl with menaces. The Germans are already unhappy about what they've had to do to bail the Greeks out, so any more handouts are not going to go down well, possibly even ending up with the Germans leaving the Euro, assuming they don't just decide to go ahead and leave anyway, German EUphilism having been stretched pretty much to its limits by the current crisis and the usual intransigence of the French who as ever only seem to be looking out for their own interests, rather than the EU's as a whole.
I'm no expert, there are those like "The Slog" who have been predicting this fiasco since it more or less started. But I'm starting to really worry now, a complete financial collapse will leave a lot of people feeling vulnerable and scared, that's when extremist groups rise, that's when wars start.

4 annotations:

Bill said...

I think the 'war' is already well underway but is actually being waged in finance houses around the world rather than on the streets.
Though at some point some country will leave the Euro and it will be sudden and without warning.

Whether this triggers a complete financial collapse remains to be seen but as long as whatever appears on the other side is better than what we have now it will be worth it in my humble...

James Higham said...

The Irish never were noted for their fiscal soundness. Good singers and drinkers though. Good bombers.

Anonymous said...

Bit o fun on a dark day

Irish Finance minister stood on Dublin Liffey bridge at midnight ready to jump
Little fella in a green velvet suit asks whats the problem
Banks collapsed says Mr Lenihan
No problem says the little fella,do me a lttle favour and there will be a Leprechauns pot of gold waiting for you in the
office tomorrow,did you not know we Leprechauns have saved Ireland many times
Whats the favour,queried Lenihan .
Ah well ,you see ,we good little catholic gnomes are still virgins ,could you possibly come down to the embankment
and give me a good humping,
Lenihan obliges and both return to the bridge to go their separate ways
Some distance apart the little fella ,now smiling ,shouts to Lenihan,"How old are you ,Sir"
54 comes the reply from Lenihan
"54 And you still believe in Leprechauns,Sir.

The Boiling Frog said...

...and for the icing on cake, the German paper Der Spiegel has a big splash today, based on secret documents, on how the Germans were blackmailed by the French in 1989 into giving up the Mark in return for French support for reunification.

Hugely damaging for German opinion in bailing out other countries