Economic Crisis Blogburst 4: The collision of dreams and reality

– Michael Hennigan of Finfacts explains just why the big boys are in old Dublin town today

– And, the word from the FT

Ireland’s basic problem is that it now has to choose between its own sovereign solvency and the solvency of its banks. Other European countries – in and out of the eurozone – may soon face the same choice. In such a world, keeping banks afloat with public capital risks sinking the sovereign – and with it, the whole banking system.

– The loss of economic sovereignty is a big theme in several of today’s leading articles (of which more later). Only the Independent takes a pragmatic stance:

Dwelling on how it has all come to this is a waste of time now. But dwelling any longer on taking the politically and economically tough decisions that have to be taken will be unforgivable. So let us have clear language and clear leadership on this. There is no time for anything else.

Certainly not semantics according to Sean Power, Fianna Fail Deputy for Kildare South…

– Gerard O’Neill thinks Simon Heffer has a point when he says Germany should pull back to a reformed DM

– Peadar Kirkby says that the crisis requires a revisiting of the failed processes that led to the current crisis:

…it is most important that we recognise the very familiar posture adopted by Irish policy makers and by the Irish state, since it highlights what will have to change if we are to have any hope of building a more sustainable and equitable future. Another way of putting this is to state that the largely economic and financial discourse that dominates debate needs to be balanced by a discourse that focuses on the administrative and the political features of the current crisis.

– Eurointelligence with a neat observation that Ireland is not first in the queue of pain:

The Irish finance minister said he welcomed the EU’s offer, but insisted that aid was not inevitable. (The Irish understand that they are in relatively good position, as Ireland is fully funded until the middle of next year, while Portugal needs to tap the markets early next year. The Irish crisis thus hurts Portugal more than Ireland).

– Izabella Kaminska reckons however that Ireland has gone one bluff too far… She also demonstrates a very Baker like command of the archives and traces the plot back to that over ambitious bank bail out… well worth reading the whole thing…

– The Charlemagne blog at the Economist traces the dilemma in roughly similar terms to those traced yesterday in the same Mr Baker’s blog here on Tuesday

– Der Speigel says Ireland should stop slagging off those who want to help them

– Brian Cowen wants to get away from word games, apparently… But Simon Nixon has him (and Paddy Power) down as a gambler who is playing a limited hand to the best of his ability…

– Iain Martin reckons the final corollary is likely to be tighter fiscal control from the EU centre bringing back into question the problem of fiscal sovereignty… Or as David Bowers put it six months ago (via P O’Neill):

The politicisation of the allocation of capital, and the re-regionalisation of the cost of capital, are themes that we are going to hear a lot more about – long after the Greek dust has settled.

– One of today’s mini big subjects will be the mortgage arrears problem. Karl Deeter tries to quantify it (warning: scary numbers)… And then comes up with a number of smart ideas to help spread the social and economic impact…

– And finally, Suzy has a YouTube of Dick Roche’s deft pitch for FF votes at the upcoming election, on BBC’s Newsnight…

Mick is founding editor of Slugger. He has written papers on the impacts of the Internet on politics and the wider media and is a regular guest and speaking events across Ireland, the UK and Europe. Twitter: @MickFealty