Saturday, May 07, 2011

Irish Independent column bangs drum for copy-cat Irish Default.

The column referred to in this post's headline is linked here. It concludes as follows:

For every bond sold by the Irish Government or loan taken out by the Irish bank there was a lender, usually British, German and French banks, who were only too happy to give us the money. You can't have irresponsible borrowers without irresponsible lenders.

Unfortunately it has only been the irresponsible borrowers who have had to pay for their mistakes, with the ECB lending the Irish banks over €70bn, money for which the Irish taxpayer is now in the hook, to repay senior bondholders in full.

Will the prospect of a Greek default and possible departure from the euro lead to a change in this unsustainable and unfair policy? Will the EU, the ECB and the French and German governments finally acknowledge that Ireland and the other peripheral eurozone countries would not have been able to commit the financial excesses which they did without the assistance and co-operation of British and mainland European banks? Unless and until they do, the crisis on the eurozone periphery will continue to worsen.



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