A new article from Morgan Kelly published on the Irish Times is describing the series of mistakes the Irish government has perpetrated in the last 3 years and which brought the country on the brink of bankruptcy.
A small excerpt below:
WITH THE Irish Government on track to owe a quarter of a trillion euro by 2014, a prolonged and chaotic national bankruptcy is becoming inevitable. By the time the dust settles, Ireland’s last remaining asset, its reputation as a safe place from which to conduct business, will have been destroyed.
Ireland is facing economic ruin.
While most people would trace our ruin to to the bank guarantee of September 2008, the real error was in sticking with the guarantee long after it had become clear that the bank losses were insupportable. Brian Lenihan’s original decision to guarantee most of the bonds of Irish banks was a mistake, but a mistake so obvious and so ridiculous that it could easily have been reversed. The ideal time to have reversed the bank guarantee was a few months later when Patrick Honohan was appointed governor of the Central Bank and assumed de facto control of Irish economic policy.
If the current prediction can sound bleak the reality is that Ireland is by no way the only European country facing a reality check after decades of unchecked greed and excesses. It is definitely worth a read to find out how both banks and politicians have sold the country to cover the insane gambling of the Irish banks and the losses of foreign investors. Major corrections all over Europe are coming due and we can only hope that other European countries will learn from the Irish disaster when it will come to choose between saving banks or the welfare of the people.
A small excerpt below:
WITH THE Irish Government on track to owe a quarter of a trillion euro by 2014, a prolonged and chaotic national bankruptcy is becoming inevitable. By the time the dust settles, Ireland’s last remaining asset, its reputation as a safe place from which to conduct business, will have been destroyed.
Ireland is facing economic ruin.
While most people would trace our ruin to to the bank guarantee of September 2008, the real error was in sticking with the guarantee long after it had become clear that the bank losses were insupportable. Brian Lenihan’s original decision to guarantee most of the bonds of Irish banks was a mistake, but a mistake so obvious and so ridiculous that it could easily have been reversed. The ideal time to have reversed the bank guarantee was a few months later when Patrick Honohan was appointed governor of the Central Bank and assumed de facto control of Irish economic policy.
If the current prediction can sound bleak the reality is that Ireland is by no way the only European country facing a reality check after decades of unchecked greed and excesses. It is definitely worth a read to find out how both banks and politicians have sold the country to cover the insane gambling of the Irish banks and the losses of foreign investors. Major corrections all over Europe are coming due and we can only hope that other European countries will learn from the Irish disaster when it will come to choose between saving banks or the welfare of the people.
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