Thursday 22 February 2018

Time to call in the debt disposal squad

That we have a major problem in the Irish economy at the moment is beyond question. How to solve it? The same way you solve any other problem, using the same basic principles -- you go back to the source, then take whatever steps are necessary.

Leave aside the sloppy introduction of the euro, the easy money that then became available to Irish banks, the lack of oversight here and in Europe on the reckless inter-bank lending; the source of the current Irish problem is the blanket guarantee given to the Irish banks by then Finance Minister Brian Lenihan.

When the mist cleared and the money markets saw the emerging mountain of bank debt that Ireland had taken on, on top of its own growing sovereign debt caused by the budget deficit, they did the simple arithmetic and came up with the simple conclusion -- couldn't be done.

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