Maman Poulet has a collection of links reacting to the Republic of Ireland’s
government tax-payer guarantee to the banks, which we are told emerged following a meeting requested by the chief executives of the two main banks. Meanwhile Germany has joined in, apparently in response to a consortium of banks withdrawing support [pdf file] from a loan to Hypo Real Estate which was announced only last week. But if I was sceptical before, Robert Peston’s update to his post on the German move only serves to heighten that scepticism. Maybe not “out of jail” just yet, Brian. From Peston
For example, it’s not clear whether this is a formal, unambiguous commitment to take the retail liabilities of the German banks on to the public sector’s balance sheet – a commitment would add many hundreds of billions of euros to Germany’s national debt. Also, to add an almost comic element to Germany’s evasive action, almost simultaneously there’s been a statement by the EU Competition Commissioner Neelie Kroes that blanket guarantees on bank deposits by individual members states are “discriminatory”.
Kroes added that she was hopeful that Ireland’s controversial 100 per cent guarantee – launched last week – would be modified in “a form for which we can together state that it is [in] line with the treaty”. At a time when there’s profound unease across Europe about the safety and security of our banks, the spectacle of governments seemingly at odds with each other and with the Commission is unsettling, to put it mildly.
Update Robert Peston, again, clarifies what the Germans did – “It gets weirder.”