This is a stress test for all of Europe
IT would be nice to think that we are nearing the endgame in what has become an extremely messy rescue of the Irish public finances and banking system. Given what has happened so far, that may be too optimistic, but things cannot go on like this for much longer.
The much-touted summit in Brussels today appears to have failed before it starts. It looks like it will not be possible to get agreement on the main item -- increasing the effective lending capacity of the EU rescue fund from €250bn to €440bn. The word is that it may be June before agreement is possible.
That is particularly unfortunate because it looks like Portugal will soon be knocking on the bailout window. The Government's latest austerity budget failed to get through parliament and the prime minister resigned. A bailout deal with the EU/IMF to finance its public services looks inevitable -- and imminent.