James Fitzsimons: Cut us a break, Frankfurt, until banks are fixed -- we've earned it
Ireland's recovery is being hampered by policies that benefit the continent, warns James Fitzsimons
In the four years since the financial crisis began, the EU has failed to stabilise the European banks. It will let governments flounder as they struggle to save their ailing economies, but it refuses to allow banks default.
In the early days of the downturn, the EU banking model was criticised and blamed for dragging the rest down and delaying global recovery. The IMF was one of its biggest critics. Now they work hand-in-hand to save a system that is rotten to the core.
The global downturn brought with it the worst credit crunch in history. It's still here and it's getting worse. No amount of talking up our future prospects will change that. Our own government policy is directly correlated to EU banking policy. Save the banks at all cost. Leave the rest. When the late Brian Lenihan gave the bank guarantee, it flew in the face of conventional wisdom and it caused dismay among our EU partners. Later it was copied and used elsewhere. What Mr Lenihan didn't know at the time was that our banks had been mismanaged for years and they were essentially insolvent. This was nowhere more pronounced than at Anglo Irish Bank (now the IBRC). Its reckless lending strategies were copied by the rest, who were led like sheep by their boards and chief executives.