Sunday, November 20, 2011

Detail behind the Irish Bailout

The Irish Times, this morning has an article, revealing some of the goings on which led to the Irish Bailout, a crucial step in the attempt to protect the Continent's corrupted banking system. It is linked from here, and the following gives a flavour:

SEPTEMBER 24th “THE WORLD CHANGED FOR US AND THE EURO ZONE”

The concern in Brussels about Ireland intensified almost immediately. At a meeting in the commission on September 24th, officials reviewed data from Dublin on the new plan for the banks, which was to be published on September 30th.

As the cost of attempting to rescue Anglo Irish Bank ballooned, the total bill for bank bailouts would rise €17 billion to €45 billion and possibly as high as €50 billion. In the new worst-case scenario, Ireland was looking at a budget deficit of 32 per cent of gross domestic product. This was almost 11 times the EU limit. No one could remember a deficit like it.

“That was the first time that everything or close to everything was revealed to us from the regulators in Ireland. After that the world changed for us and probably changed for the rest of the euro zone,” says a commission source.

Many individual names appear in the account, but the roles of Schauble and Lagarde are at the forefront, with their controlled bit-players such as Rehn always evident. The following extract provides a sample of the detail :

Lenihan went to Brussels on the Tuesday evening for a scheduled meeting of eurozone finance ministers. Arriving late due to fog at Brussels airport, he was the last man into the meeting and came under huge pressure from Schäuble to leave immediately and announce henceforth that Ireland was applying for aid. Christine Lagarde, the French minister, backed Schäuble. However, Lenihan argued that he had no mandate to negotiate a bailout. He was backed by Austrian minister Josef Pröll and, at a follow-on meeting the next day, by British chancellor George Osborne. That night, however, the euro-zone ministers endorsed moves to intensify “short and focused” preparations for a rescue plan. The game was almost up.

An important account, especially if the EU is ever to be brought to face a Nuremburg style reckoning, which it most assuredly now fully deserves!

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