Ireland at risk in Dubai debt fallout
Ireland could be caught in the crossfire of Dubai's debt crisis in three ways -- most crucially because the emirate's problems have made investors edgy about the security of state-backed guarantees.
As many as 6,000 Irish people, including high-profile figures like rugby star Brian O'Driscoll, invested heavily in Dubai in recent years.
Dubai's rulers the Maktoum family have extensive business interests in Ireland with nearly 300 people working mostly in the bloodstock industry and the family controls some of Ireland's best real estate for producing thoroughbreds.
Analysts think that the troubles in Dubai may make international investors nervous about state-guaranteed debt in general.
Yesterday in an editorial the Financial Times commented: "Markets will not soon return to the panic of September 2008: the financial sector now has state backstops. But, because of these guarantees, fearful investors have started to worry about how safe sovereign debt is. Investors are growing nervous about Greece and Ireland in particular."
Dubai is facing up to a major debt crisis after the state-owned Dubai World conglomerate -- one of the emirate's biggest and best-known companies -- requested a six-months delay in repaying its massive debts. Dubai World is one of three government-controlled conglomerates.
Furious bondholders have arranged emergency talks with Dubai officials this week in an effort to get some clarity on the financial health of the state-owned company.
Many Irish individuals have invested in Dubai, paying anything from €100,000 to well over €1m for apartments, villas and retail space. Bank of Ireland participated in a $5.5bn (€3.7bn) syndicated loan facility to Dubai World in June 2008, according to Davy stockbrokers