Thursday 14 December 2017

Anglo bailout saved nation from anarchy in the streets

Thomas Molloy

Thomas Molloy

THE Labour Party's decision to oppose the bank guarantee scheme two years ago leaves that party in the enviable position of being able to crow 'I told you so' as we watch the slow-motion car crash that our economy has become. The question Labour must answer is whether a high-speed car crash would have been any better?

While it is understandable that Labour washed its hands of the fraying guarantee scheme that has left most banks in state hands, close to collapse and unable to lend, a decision not to guarantee Anglo Irish Bank's liabilities would have had dire consequences that might have left us without any sort of banking system and no access to the markets to fund day-to-day borrowings.

It is, of course, impossible to say with certainty what would have happened had Labour been in power and told Anglo's bond holders to take a hike but nobody disagrees that the collapse of a major bank (and that is what Anglo had become) always has far-reaching consequences that are rarely understood at the time.

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