Brendan Keenan: Instead of flogging the state silver, let’s use it as collateral
AN old Russian proverb says that he who lands you in the smelly stuff isn’t necessarily your enemy, and he who gets you out of it isn’t necessarily your friend. Just like the bailout, perhaps?
Certainly Enda Kenny could be forgiven for being glad he is not Jose Luis Rodriguez Zapatero, Spain’s PM. And, of course, he could not possibly be Silvio Berlusconi. There is all that cheap money for a start. Last week, the Italians had to offer an interest rate of 5.6 per cent to get investors to lend it a piddling €8bn for five years. The Spaniards are having to offer almost as much.
That’s more than three percentage points above the borrowing costs of the German government. Under July’s instalment of the How to Save Greece saga, Ireland (and Portugal) pay around just one percentage point more. The EU Commission plans to be even more generous; it proposes that the fund which it administers would not charge any premium at all. Unfortunately, all 27 EU states have to agree to this, and the ones outside the euro, but who still have to stand over the Commission borrowings, may think it is a bit too generous.